Taiwan Blocks Uber's Acquisition of Foodpanda for $950 Million
Investing.com -- Taiwan's Fair Trade Commission (FTC) has halted Uber Technologies' plan to acquire Foodpanda's local delivery business for $950 million due to concerns over anti-competitive practices. This decision hampers Uber's expansion efforts in Asia.
The FTC stated on Wednesday that the competitive pressure on Uber's food delivery unit in Taiwan primarily came from Foodpanda. The commission expressed concerns that the elimination of this competition could lead to increased prices for consumers and restaurants using Uber's platform.
The FTC also noted that the merger could make it more difficult for other potential competitors to enter the market. In response to this decision, Uber expressed disappointment and highlighted that it had previously proposed solutions to address Taiwan's competition concerns.
Despite this setback, Uber stated its intention to continue investing in Taiwan, which it views as one of the fastest-growing markets for food delivery.
Delivery Hero, the Berlin-based owner of Foodpanda, mentioned that Uber has the option to appeal the decision or terminate the agreement.
San Francisco-based Uber had announced its plan to purchase Foodpanda's Taiwan delivery business for $950 million in cash in May. This was to be in addition to a separate $300 million purchase of newly issued ordinary shares from Delivery Hero.
The company had planned to finalize this agreement by the first half of 2025, making it one of the largest international acquisitions in Taiwan outside the semiconductor industry.
Uber, which also operates in Japan and Hong Kong, had projected that the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from the delivery business would contribute at least $150 million annually within 12 months following the closure of the acquisition.
Delivery Hero reported that Asia represents its largest market, accounting for approximately 36% of its 2023 revenue. The company also stated that Foodpanda's Taiwan operations reached a break-even point in terms of adjusted EBITDA for the fiscal year ending in March 2024.