Delivery Hero has to part with its own subsidiary in South Korea

Delivery Hero has to part with its own subsidiary in South Korea

The food delivery service Delivery Hero has to part with its own subsidiary in the Asian country for a multi-billion dollar takeover in South Korea. The competition authority in Seoul is asking Delivery Hero to sell Yogiyo, the number two food delivery company in South Korea. Otherwise, the 3.6 billion euro takeover of market leader Woowa by Delivery Hero threatens a quasi-monopoly, the Korea Fair Trade Commission (KFTC) justified the decision. The founder and boss of the Berlin company, Niklas Östberg, had long resisted the requirement, but has now given in. The approval is "great news" for the entire industry, although he is "deeply saddened" by the sale of Yogiyo.

Third largest single market

With annual sales of $ 15.4 billion and growth of 40 percent, South Korea is the third largest market for food delivery services worldwide. The high population density and an increasing number of single households make it attractive for providers. At the stock exchange there was great sigh of relief over the approval, which had dragged on for more than a year. The share, which has meanwhile risen to the leading index Dax, jumped by more than seven percent. This could also affect the financing of the takeover. Because when Delivery Hero and the previous owners of Woowa Brothers agreed the takeover in mid-December 2019, the share was just under 50 euros. At that time it was said that Delivery Hero would pay 1.7 billion euros in cash, the rest in 40 million own shares. The ratio could change as a result of the course jump, said a spokeswoman. Delivery Hero expects the takeover to be on the dry side by the end of March.