(Reuters) – Taiwan has blocked Uber Technologies Inc.’s $950 million acquisition of Delivery Hero’s Foodpanda business on the island, citing anti-competitive concerns, the Fair Trade Commission said. ) was announced on Wednesday.
Uber and Foodpanda did not immediately respond to requests for comment outside of normal business hours.
Delivery Hero said in a statement that Uber could appeal the commission’s decision or terminate the acquisition.
The commission said in a press conference that the negative impacts of the merger outweighed the overall economic benefits and that remedial actions would not address competition concerns.
“In the food delivery platform market, Uber Eats’ main competitive pressure comes from Foodpanda. The merger will eliminate this competitive pressure,” said Chen Chi-ming, vice chairman of the Taiwan FTC.
“After the merger, Uber Eats will be less constrained by competition and have more incentive to raise prices for consumers and increase fees for restaurant operators.”
Chen added that the combined market share of both companies in Taiwan will exceed 90% after the merger.
Uber and Delivery Hero announced a Taiwan deal in May that includes a separate agreement for Uber to buy $300 million worth of newly issued shares in the German food delivery company.
The U.S. company expects the acquisition to contribute at least $150 million annually to the delivery business’ adjusted core earnings within a year of closing, likely in the first half of 2025.
Online food delivery platforms make up a small portion of Taiwan’s competitive food delivery market. According to the companies, Foodpanda’s operations on the island were breakeven in terms of adjusted core profit for the 12 months ending March 31, 2024.
(Reporting by Wen-Yi Lee and Jenny Kao in Taipei and Shubham Kalia in Bengaluru; additional reporting by Rishabh Jaiswal; Edmund Claman, Raju Gopalakrishnan and Barbara Lewis edit)
