(Reuters) -Taiwan has blocked Uber Technologies (NYSE:UBER)’ $950 million purchase of Delivery Hero’s Foodpanda business on the island due to anti-competition concerns, the Fair Trade Commission (FTC) said on Wednesday.
Uber, Delivery Hero and Foodpanda did not immediately respond to requests for comment outside regular business hours.
In a media briefing, the commission stated that the merger is prohibited because its negative impact on market competition outweighs the overall economic benefits, and competition cannot be maintained through corrective measures.
“In the food delivery platform market, UberEats’ main competitive pressure comes from Foodpanda. The merger would eliminate this competitive pressure…Post-merger, UberEats would be less constrained by competition, giving it more incentive to raise prices for consumers and even increase commissions for restaurant operators,” said Chen Chih-min, vice chairman of Taiwan’s FTC.
Chen added that post-merger, the combined market share of both companies in Taiwan would exceed 90 percent.
Uber and Delivery Hero announced the Taiwan deal in May, which also included a separate agreement for Uber to purchase $300 million worth of newly issued shares of the German food delivery firm.
The U.S. company expected the acquisition to contribute at least $150 million annually to the adjusted core profit of its delivery business within a year of the deal’s closing, which was seen likely in the first half of 2025.
Online food delivery platforms represent a small fraction of Taiwan’s competitive food delivery market, but Foodpanda’s operations on the island were break-even in terms of adjusted core earnings for the 12 months ended March 31, 2024, the companies said.