(Reuters) – Taiwan has blocked Uber Technologies’ (NYSE:) $950 million purchase of Delivery Hero’s Foodpanda business on the island due to competition concerns, the Fair Trade Commission (FTC) said on Wednesday ).
Uber, Delivery Hero and Foodpanda did not immediately respond to requests for comment outside of normal business hours.
At a press conference, the commission said the merger was prohibited because its negative impact on market competition outweighed the overall economic benefits and competition could not be maintained through remedial measures.
“In the food delivery platform market, UberEats’ main competitive pressure comes from Foodpanda. The merger would eliminate this competitive pressure… After the merger, UberEats would be less constrained by competition, giving it more incentive to raise prices for consumers and even increase commissions for restaurant owners,” said Chen Chih-min, vice chairman of the Taiwan FTC.
Chen added that after the merger, the two companies’ combined market share in Taiwan would exceed 90 percent.
Uber and Delivery Hero announced the deal in Taiwan in May, which also included a separate agreement for Uber to buy $300 million worth of newly issued shares in the German food delivery company.
The U.S. company expects the acquisition to contribute at least $150 million annually to the adjusted core profit of its delivery business in the year after the deal closes, which is likely in the first half of the year. 2025.
Online food delivery platforms represent a small fraction of Taiwan’s competitive food delivery market, but Foodpanda’s operations on the island broke even in adjusted core profit for the trailing 12 months. on March 31, 2024, the companies said.
