Taiwan blocks Uber's $950 million acquisition of Foodpanda

Investing.com -- Taiwan's Fair Trade Commission (FTC) has halted Uber Technologies (NYSE:UBER )' planned $950 million takeover of Foodpanda's local delivery business due to concerns over anti-competition. The decision hinders Uber's expansion efforts in Asia.

The FTC stated on Wednesday that the competitive pressure on Uber's food-delivery unit in Taiwan primarily comes from Foodpanda. The commission expressed concerns that removing this competition could lead Uber to increase prices for consumers and restaurants using its platform.

The FTC also noted that the merger could make it harder for other potential competitors to enter the market. In response, Uber expressed disappointment over the decision, stating that it had previously proposed solutions to address Taiwan's competition concerns.

Despite this setback, Uber intends to continue investing in Taiwan, which it views as one of the fastest-growing markets for food delivery.

Delivery Hero, the Berlin-based owner of Foodpanda, mentioned that Uber has the option to appeal the decision or terminate the deal.

Uber, based in San Francisco, had announced in May its plans to purchase Foodpanda's Taiwan delivery business for $950 million in cash. This was in addition to a separate $300 million acquisition of newly issued ordinary shares of Delivery Hero.

The company had intended to finalize the deal, one of the largest international acquisitions in Taiwan outside of the semiconductor industry, in the first half of 2025.

Uber, which also operates in Japan and Hong Kong, had projected that the acquisition would add at least $150 million annually to the adjusted earnings before interest, taxes, depreciation, and amortization of its delivery business within 12 months of closing.

Delivery Hero reported that Asia is its largest market, contributing approximately 36% of the company's revenue in 2023. The company also disclosed that Foodpanda's operations in Taiwan broke even in terms of adjusted Ebitda for the fiscal year ending March 2024.

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Source: Investing.com