Taiwan Blocks Grab's Acquisition of foodpanda
Taiwan’s Fair Trade Commission (TFTC) announced on Wednesday that it has blocked Grab’s planned acquisition of foodpanda in Taiwan. The commission raised concerns about competition, mainly due to Uber’s stake in Grab. This stake could reduce competition and market differences between the two companies. The TFTC pointed out past coordination between Uber and Grab. It referenced Uber's sale of its Southeast Asian operations to Grab in 2018, which violated competition law.
The regulator noted that there are significant barriers for new companies in the food delivery market. These include high capital costs, a strong restaurant network, and a delivery rider base. The TFTC rejected proposals from Grab and Uber. These included reducing Uber's stake in Grab and limiting Uber's board representation. The commission stated these measures did not sufficiently reduce anticompetitive risks.
Delivery Hero, the parent company of foodpanda, confirmed in a stock market filing that it can appeal the TFTC's decision. The company also mentioned it has protective measures in place, including a break fee arrangement. Grab expressed disappointment with the ruling. A spokesperson said that its core business in Southeast Asia remains strong. "We will continue to focus our capital and resources on executing our growth road map and empowering communities within our regional footprint," the spokesperson added.
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The decision is likely to affect Grab's expansion plans in the food delivery sector in Taiwan. It may impact its market share and growth path. Investors will be on the lookout for any appeals from Delivery Hero or further regulatory changes in the region.
Based on reporting by: businesstimes.com.sg