In a significant move on Wednesday, Taiwan’s Fair Trade Commission (FTC) announced that it has blocked Uber Technologies’ $950 million acquisition of Delivery Hero’s Foodpanda business in the region, citing concerns over the deal’s potential to stifle competition. The regulatory body believes the merger would severely reduce competition in Taiwan’s food delivery market, ultimately harming consumers and restaurant operators.
Uber, along with Foodpanda, did not provide immediate responses to the announcement outside regular business hours. However, Delivery Hero, the parent company of Foodpanda, acknowledged the FTC’s decision, revealing that Uber could either challenge the ruling through an appeal or abandon the acquisition altogether.
In a media briefing, Chen Chih-min, Vice Chairman of the Taiwan FTC, stated that the merger would result in an undue reduction in market competition. He explained that UberEats, which currently faces significant competitive pressure from Foodpanda, would lose one of its main rivals if the deal proceeded. This consolidation would leave UberEats with far less competitive pressure, possibly leading to higher prices for consumers and increased commissions for restaurants.
“Post-merger, UberEats would dominate the market without the constraint of a strong competitor, creating a higher risk of price hikes and reduced incentives for service improvements,” said Chen. The combined market share of UberEats and Foodpanda in Taiwan would exceed 90%, further intensifying concerns that the merger would create an unfairly monopolistic environment.
The FTC’s decision highlights the growing scrutiny of mergers and acquisitions in sectors where competition is already limited. Taiwan’s food delivery platform market remains relatively small but competitive, with both UberEats and Foodpanda being major players. Despite Foodpanda’s break-even performance in the year ending March 2024, the FTC believes that the merger would undermine the market dynamics that benefit consumers.
Uber had initially announced the acquisition deal in May 2024, including a separate agreement to purchase $300 million in newly issued shares of Delivery Hero, the German company that owns Foodpanda. Uber had projected that the acquisition would significantly boost its delivery business, contributing at least $150 million annually to its adjusted core profit within a year of closing, which was expected in the first half of 2025.
However, the FTC’s ruling now casts doubt on the timeline of the deal, raising questions about the future of Uber’s food delivery business in Taiwan. The company must now evaluate whether to pursue an appeal or reassess its acquisition strategy.
Taiwan’s decision is part of a broader trend of regulatory bodies globally becoming more vigilant in examining the competitive impacts of large mergers and acquisitions, especially in high-demand sectors such as food delivery services. As the industry continues to grow, authorities are increasingly focused on preventing monopolistic practices that could harm consumers and smaller businesses.
As Uber and Delivery Hero assess their next steps, the ruling underscores the importance of maintaining competitive fairness in the rapidly expanding food delivery market.
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