Delivery Hero won the approval of South Korea’s antitrust regulator to take over the country’s top food delivery company Woowa Brothers Corp in a $4 billion deal under the condition that it will sell its South Korean unit.
German food ordering firm Delivery Hero won the approval of South Korea’s antitrust regulator to take over the country’s top food delivery company Woowa Brothers Corp in a $4 billion buyout deal under the condition that it will sell its South Korean unit, the company announced on Monday.
The Berlin-based company agreed to sell its entire stake in Delivery Hero Korea, a subsidiary that runs the second-largest food delivery app in South Korea under the Yogiyo brand, to acquire the regulatory approval of the Korea Fair Trade Commission for the buyout deal.
“We are deeply saddened by the required condition to divest Delivery Hero’s subsidiary Delivery Hero Korea in South Korea,” Delivery Hero Chief Executive and co-founder Niklas Östberg said in the statement.
Delivery Hero sealed an agreement last year to purchase Woowa Brothers.
The deal is expected to boost the German company’s presence in the intensely competitive market as demand for online food delivery services continues accelerating due to the coronavirus pandemic.
The shares of Delivery Hero increased 3.6 percent after announcing the approval of the South Korean regulator.
The deal is expected to close in the first quarter of next year.
“We wish Delivery Hero Korea the best for the future, and will work hard to ensure that this transition is as smooth as possible for all impacted employees,” said Östberg.
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