Following the announcement by the Korea Fair Trade Commission on December 28, Delivery Hero will receive conditional regulatory approval for the strategic partnership with Woowa Brothers Corp., South Korea’s largest online food delivery platform.
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As part of the transaction, a joint venture will be established in Singapore to manage the foodpanda operations of the Delivery Hero Group and Woowa entities in Asia.
The strategic partnership will enable both parties to leverage market insights, technology expertise and operational know-how across all verticals, including food delivery, fintech, quick commerce, and other business areas
The regulatory approval will be conditional on Delivery Hero divesting its South Korean subsidiary Delivery Hero Korea LLC (including “Yogiyoâ€) as well as on behavioural remedies applicable to the operation of Delivery Hero Korea LLC until completion of divestiture.
The final written approval and closing of the strategic partnership is expected to occur in the first quarter of 2021.
The transaction includes the establishment of a joint venture in Singapore.
The transaction agreements were signed on December 13th, 2019, and the transaction has since been under review by the KFTC.
As agreed at signing of the transaction in December 2019 and based on the then-agreed volume-weighted average price of the Delivery Hero share and valuation of Woowa, the consideration consists of both a cash and an equity component (approximately €1.7 billion in cash and approximately 40 million in Delivery Hero shares).
This corresponded to US$ 4.0 billion, or €3.6 billion, on a cash and debt free basis (before customary adjustments) at the time of signing, and prior to the share price development between December 2019 and closing.
The Singapore-based joint venture is expected to manage the operations of Delivery Hero in Asia (through the foodpanda brand in Bangladesh, Cambodia, Hong Kong, Japan, Laos, Malaysia, Myanmar, Pakistan, Philippines, Singapore, Taiwan, and Thailand) and of Woowa’s regional entities (in Korea, Vietnam, and Japan).
Bongjin Kim, CEO & Founder of Woowa, will be appointed Chairman of the Board and Executive Director of the joint venture. Jakob Angele, current CEO of foodpanda Asia, and Sean Oh, current CFO/CSO of Woowa, will both be appointed Co-CEOs of the joint venture, taking care of the foodpanda and Woowa business units respectively. ■