Korea’s top delivery app Baemin M&A may face antitrust questions

[Photo by Lee Chung-woo]

It remains to be seen whether the local anti-trust authority will grant Korea’s top food delivery app Baedal Minjok (Baemin) to join the industry’s second and third and go under Germany’s Delivery Hero as one family.

The $4 billion M&A deal, where Woowa Brothers agreed to sell 87 percent owned by other investors to Delivery Hero requires review by the Fair Trade Commission.

The Korean company on Friday announced it entered an agreement with Delivery Hero to sell a combined 87 percent stake owned by investors. The German company will later acquire the remaining 13 percent stake from Woowa Brothers board members.

Under the Korean antitrust law, a company with assets or revenue of 300 billion won ($255 million) must gain a regulatory approval on acquisition of a company with assets of over 30 billion won. Woowa Brothers registered 319.2 billion won in revenue last year. Delivery Hero reportedly earned 123.3 billion won sales from Yogiyo and Baedaltong, Korea’s No. 2 and 3 food delivery apps that went under the German name last year.

Baedal Minjok, Yogiyo and Baedaltong

Market watchers are unsure whether the antitrust watchdog would give a go-ahead to the M&A as Delivery Hero would become a monopolistic player of the Korean online food delivery market after the stake acquisition. According to market researcher Nielson Korea, Baemin, operated by Woowa Brothers claimed 55.7 percent of Korea’s online food delivery market while Yogiyo and Baedaltong accounted for 33.5 percent and 10.8 percent, respectively, last year.

It is unclear how the FTC will review antitrust issues over the platform M&A due to lack of precedent. .

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