Delivery Hero required to sell Yogiyo before taking over Woowa

The Korea Fair Trade Commission (KFTC) gave conditional approval for Germany's Delivery Hero (DH) to buy Woowa Brothers, the country's top food delivery app operator, for US$4 billion.

South Korea's antitrust regulator granted permission for the takeover on condition that DH unloads its 100 percent stake in its South Korean affiliate Delivery Hero Korea, operator of Yogiyo, within six months.

KFTC said it attached the condition due to the high concern that the proposed takeover could limit competition.

Various stakeholders of multifaceted markets linked to delivery app platforms, such as restaurants, consumers, and delivery workers, would be impacted by the acquisition, according to KFTC.

DH announced in December 2019 that it will acquire an 88 percent stake in Woowa, the operator of delivery app Baedal Minjok, or Baemin.

Woowa accounts for 60 percent of the country's online food delivery services market. There were over 13 million monthly users of Baemin in September, followed by Yogiyo with 6.6 million.

Critics said with the combined market share of Baemin and Yogiyo accounting for some 99 percent of the market, the merger could lead to a monopoly and hurt competition.

South Korea's food delivery app market, valued at 10 trillion won last year here, sharply grew this year amid the pandemic, as more people refrained from dining out.