German company Delivery Hero has had its $4 billion acquisition of South Korean food delivery service owner Woowa approved. However, the Korea Fair Trade Commission stipulated that Delivery Hero must sell its South Korean subsidiary Yogiyo.
While the divestiture would decrease some of Delivery Hero’s pricing power in the market, the main goal of the deal remains intact. Delivery Hero hopes to combine its logistic ability with Woowa’s marketing skill, so even once Yogiyo is sold within the first six months, it should still be able to enact its main strategy.
While he was happy with the approval of the deal, Delivery Hero CEO Niklas Östberg expressed his disappointment with the divestiture, saying “We are deeply saddened by the required condition to divest Delivery Hero’s subsidiary.”