S Korean restaurant owners express concern over $4b Delivery Hero deal

South Korean restaurant owners expressed concern on Monday over food delivery giant Delivery Hero’s proposed $4 billion acquisition of its local rival, saying the move could undermine competition and lead to higher fees.

Delivery Hero, the second-largest food delivery app operator in South Korea, said last month that it agreed to buy larger rival Woowa Brothers backed by Goldman Sachs in a deal subject to antitrust approval.

The combination of the two giants would create an entity with a combined market share of nearly 99% in food delivery apps, according to data from mobile big data platform IGAWorks.

Restaurant owners, already struggling with the slowing economy, raised concerns that the dominant player would raise commissions that it charges restaurant owners for taking orders via their apps.

“The biggest problem is that the companies can move the market to whatever direction they want to,” said Kim Kyung-moo, who runs a franchise restaurant, said at a news conference at the parliament.

Restaurant owners, food delivery riders and lawmakers urged the fair trade commission to thoroughly review the potential merger, which they said could also limit consumer choices.

A spokesman at Woowa Brother told Reuters that the firm is not planning on increasing commission fees.​​​​​​

South Korea, with a dense population and high smartphone use, is the world’s fourth biggest market for online food orders, with an annual value of $5.9 billion.

Berlin-bgased Delivery Hero last week submitted an application to the Korea Fair Trade Commission (KFTC) for an approval, an official at the antitrust regulator said, declining to comment further as a review is in progress.

In 2009, the watchdog approved U.S. online commerce firm eBay Inc’s <EBAY.O> deal to acquire local rival Gmarket in South Korea on the conditions that there would be a ban on raising sales commissions for the next three years.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.