German company urged to give up Yogiyo ownership to purchase Baedal Minjok
Germany’s Delivery Hero won conditional approval on Dec. 28 to purchase Korea’s leading food delivery app, Baedal Minjok of Woowa Brothers, from Korea’s Fair Trade Commission.
Delivery Hero will have to give up its ownership of Korea’s No. 2 player, Yogiyo, to go ahead with the acquisition of Baedal Minjok, which debuted in 2011 to grow into the business bellwether.
The anti-trust watchdog feared that the proposed M&A might end up creating a monopolistic company as their combined market share is higher than 99 percent.
The commission’s chief Joh Sung-wook said that the competition between Baedal Minjok and Yogiyo is necessary to improve consumer welfare.
“Through the technical edge of Delivery Hero and the marketing skills of Baedal Minjok, the two outfits will be able to achieve synergy effects,” Joh said.
However, some observers criticized the decision as amply demonstrated by the comments from the Korea Startup Forum.
The entity came up with an announcement that the Fair Trade Commission turned a blind eye to the reality where any platform companies can tap into the food delivery market.
“The mergers between Woowa Brothers and Delivery Hero are the biggest M&A in the country’s startup industry and significant global milestone,” the forum said.
“The ruling of the Fair Trade Commission would negatively affect the global value of Korean startups as well as blocking their global advances.”