Taiwan’s competition watchdog quashes Grab’s acquisition of foodpanda in Taiwan
Grab said in March it would pay US$600 million in cash
[SINGAPORE] Taiwan’s Fair Trade Commission (TFTC) announced on Wednesday (Oct 21) that it has barred Grab’s acquisition of foodpanda in Taiwan.
The competition watchdog said it had identified a number of competition concerns, mainly Uber’s stake in Grab that could lead to both parties having a reduced incentive to compete and carve out distinct market shares.
TFTC also referenced previous conduct by Uber and Grab that had raised the risk of coordination between the two parties: Uber’s deal with Grab to sell its South-east Asian operations in 2018 was designed in a way that would have been difficult to reverse, despite the two sides knowing or being expected to know that the transaction would violate competition law.
The barriers to entry for new players in the food delivery market were high, noted TFTC, given that substantial capital investment, a restaurant base and a network of delivery riders and consumers were needed.
The regulator said that proposals by Grab and Uber such as the diluting of Uber’s stake in Grab, restricting Uber from having a board seat in Grab, and the prohibiting of the exchange of competitive information was not enough to ensure that the overall economic benefits outweighed the anticompetitive effects.
Delivery Hero, foodpanda’s parent company, said in a stock market filing on Wednesday that the right to appeal is unaffected by the TFTC decision, and that it has appropriate deal protections in place, including a break fee arrangement.
Grab said it was disappointed by the decision. “Grab’s core business in South-east Asia remains robust. We will continue to focus our capital and resources on executing our growth road map and empowering communities within our regional footprint.”
Back in March, Grab announced that it would acquire foodpanda Taiwan from Delivery Hero for US$600 million, subject to regulatory approvals.
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