Taiwan Blocks Uber’s $950 Million Foodpanda Acquisition Over Competition Concerns
In a move to protect market competition, Taiwan’s Fair Trade Commission (FTC) has rejected Uber Technologies’ proposed $950 million purchase of Foodpanda’s business on the island. The decision comes after regulators raised concerns that the merger would stifle competition and lead to higher prices for consumers.
A Threat to Competition
The FTC cited the potential negative impact on market competition as the primary reason for blocking the deal. According to Chen Chih-min, vice chairman of Taiwan’s FTC, the merger would eliminate the competitive pressure that Foodpanda currently exerts on UberEats, allowing the latter to raise prices and increase commissions for restaurant operators. Post-merger, the combined market share of both companies in Taiwan would exceed 90 percent, further solidifying UberEats’ dominance.
The Deal’s Details
Uber and Delivery Hero announced the Taiwan deal in May, which included a separate agreement for Uber to purchase $300 million worth of newly issued shares of the German food delivery firm. The U.S. company expected the acquisition to contribute at least $150 million annually to the adjusted core profit of its delivery business within a year of the deal’s closing.
Foodpanda’s Operations in Taiwan
Online food delivery platforms, including Foodpanda, represent a small but significant fraction of Taiwan’s competitive food delivery market. Notably, Foodpanda’s operations on the island were break-even in terms of adjusted core earnings for the 12 months ended March 31, 2024.
Regulators Take a Stand
By blocking the deal, Taiwan’s FTC is sending a clear message that it will not tolerate anti-competitive practices that could harm consumers and the broader market. As the food delivery market continues to evolve, regulators will be keeping a close eye on mergers and acquisitions to ensure that competition remains healthy and vibrant.
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