Uber Technologies Inc is buying Delivery Hero SE’s Foodpanda business in Taiwan for US$950 million, shoring up its control of a key Asian market as it seeks to expand in the region.
Uber, whose meal delivery business outperformed globally during the first quarter, aims to complete the all-cash deal by the first half of next year, the company said in a statement.
The acquisition, one of Taiwan’s largest outside of the chip sector, also marks a retreat for Delivery Hero from Asia.
Photo: Bill Chen, Taipei Times
Both parties said that the takeover was contingent on regulatory approval — a potential wrinkle given Uber and Delivery Hero are now the two dominant players in the market.
Foodpanda and Uber Eats have been neck-and-neck in Taiwan’s food delivery space for years. As of August last year, Foodpanda maintained a slight lead with 52 percent of food delivery order volume compared with Uber Eats, according to data from Measurable AI, a Hong Kong-based firm that tracks business receipts.
Uber aims to combine the two businesses under the Uber Eats brand, and separately agreed to purchase US$300 million of newly issued Delivery Hero stock, the statement said.
Delivery Hero said it hoped to use the proceeds from the deal to buy back convertible bonds.
Uber Eats has grown in major international delivery markets including Australia, France and Mexico, while adding new retail and grocery partners to its platform. A nascent, but growing advertising business has also helped expand margins for the delivery business.
Delivery Hero CEO and cofounder Niklas Ostberg justified the acquisition by saying that the Berlin-based company, needs to focus its “resources on other parts of our global footprint, where we feel we can have the largest impact for customers, vendors and riders.”
The firm has sought buyers for Foodpanda businesses beyond Taiwan, with less success. Delivery Hero in February said that negotiations to sell some of its operations in Southeast Asia had fallen through.
While the deal is ongoing, Foodpanda would operate as usual in Taiwan, giving customers and vendors the best service possible, the statement said.
When the deal wraps up, the platform’s local consumers, merchants and delivery partners would be transitioned to Uber Eats, it added.
Consumers’ Foundation honorary chairman You Kai-hsiung (游開雄) yesterday said that the Fair Trade Commission (FTC) should be wary of the deal resulting in a monopoly.
As it involves the two largest food-delivery businesses in Taiwan, the resulting lack of competition could impact consumer rights, You said.
FTC Vice Chairman Andy Chen (陳志民) said that the agency has not yet received an application for the acquisition.
Given that Uber Eats and Foodpanda are the nation’s two largest food-delivery platforms, they need to file a proposal for the merger under the Fair Trade Act (公平交易法), he said.
While the acquisition could help reduce costs and enhance service quality, without competition, businesses might also be incentivized to reduce service quality to consumers and restaurants, Chen said.
If necessary, a public hearing or symposium could be held to collect a range of opinions about the deal and the commission would “prudently handle” the case to avoid restricting competition, he said.
Additional reporting by CNA
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