The food delivery company Delivery Hero accepts the conditions for the planned takeover of the competitor Woowa. The German company must first sell its South Korea subsidiary Yogiyo, as the South Korean antitrust authority KFTC announced on Monday. The decision is in line with a recommendation by the relevant department in November. Delivery Hero founder Niklas Östberg actually wanted to avoid the Yogiyo sale, but now he agrees. “The approval for our partnership with Woowa is great news for both of our companies and the entire industry,” said the CEO, according to the announcement.
Boom on the stock market
This was well received by investors: the shares started significantly higher in Xetra trading and temporarily increased their gain to more than ten percent. For the first time in its history, the shares were traded at prices above the 130 euros mark. In any case, the papers have been an investor favorite for months. The business with food deliveries is booming in the face of closed restaurants in the Corona crisis. In the course of the year so far, the delivery papers have now gained around 80 percent, which means first place in the Dax. Delivery Hero is now worth around 25 billion euros on the stock exchange.
The regulatory authority KFTC justified its decision with the fact that Yogiyo and Woowa with the brand “Baedal Minjok” would have a market share of 99.2 percent. This could lead to higher fees for restaurants and also harm customers. In addition, there is a risk that other market participants will be prevented from entering the market due to the strong market power and information advantage.
Delivery Hero announced the purchase of Woowa a year ago. At that time, the companies had agreed on a price of 3.6 billion euros. Around 1.7 billion euros of this should flow in cash, the rest will be paid for with Delivery Hero shares. The Dax group now expects the deal to be concluded in the first quarter of 2021.