Delivery Hero slumps as sale of Taiwan subsidiary to Uber blocked

(Sharecast News) - Delivery Hero tumbled on Friday after the sale of its Taiwan subsidiary to Uber Technologies was blocked. The Taiwan Fair Trade Commission ruled that the proposed takeover of Foodpanda could reduce competition.

In a statement released on Christmas day, the company said: "Delivery Hero...confirms that the TFTC has issued a press release today informing of its decision not to issue approval for the intended sale of Delivery Hero's Foodpanda business in Taiwan to Uber."

According to Reuters, Chen Chih-min, vice chairman of TFTC, said: "In the food delivery platform market, UberEats' main competitive pressure comes from Foodpanda. The merger would eliminate this competitive pressure.

"Post-merger, UberEats would be less constrained by competition, giving it more incentive to raise prices for consumers and even increase commissions for restaurant operators."

Delivery Hero had announced the intended sale of its Foodpanda business on 14 May 2024.

The deal was subject to the fulfilment of customary closing conditions and obtaining required regulatory approvals, including merger control approval by the TFTC.

Delivery Hero said that Uber may appeal the decision by TFTC or terminate the transaction.

At 0850 GMT, Delivery Hero shares were down 6.4% at €26.76.