DH to Sell Yogiyo to Acquire Baemin... Accepts Fair Trade Commission Conditions (Comprehensive)

Baemin "We Will Do Our Best to Pioneer the Asian Market"

[Asia Economy Reporter Kim Cheol-hyun] Delivery Hero (DH) has decided to accept the conditional approval decision by the Korea Fair Trade Commission (KFTC) to sell Delivery Hero Korea (DHK) in order to merge with Woowa Brothers, the operator of Baedal Minjok. This means selling Yogiyo to acquire Baemin.

According to industry sources on the 28th, DH has accepted the KFTC's decision to sell 100% of DHK shares as a condition for the merger with Woowa Brothers and will proceed with the sale process. On the same day, DH announced on its website that the KFTC conditionally approved Woowa Brothers' acquisition and expected the deal to be completed within the first quarter of next year. Woowa Brothers also stated, "Regarding our corporate merger, there was an announcement of conditional approval by the KFTC and a statement of acceptance from Germany's Delivery Hero."

The sale conditions and the counterparty have not been decided. The KFTC requires DH to sell all DHK shares to a third party within six months to approve Woowa Brothers' acquisition. If unavoidable circumstances are recognized, an extension within the six-month period can be requested.

In November, DH received a review report from the KFTC including the condition to sell Yogiyo as part of the conditional approval for the merger and began internal review. At that time, DH stated, "We do not agree with the KFTC's decision. We will raise objections and try to persuade the full commission," leading the industry to expect that DH would find it difficult to decide to sell Yogiyo.

However, DH appears to have judged that acquiring Baemin to strengthen its position in the Korean market and then targeting Asia based on that is more beneficial than having the M&A fall through. Accordingly, it is reported that DH recently decided to sell Yogiyo and proceed with the merger with Woowa Brothers.

With DH's acceptance of the Yogiyo sale, Baemin's strategy to enter the global market based on this M&A has accelerated. DH plans to establish and operate a joint venture called 'Woowa DH Asia' with Woowa Brothers. Woowa DH Asia will oversee DH's Asian businesses such as Foodpanda and Woowa Brothers' operations in Korea, Vietnam, and Japan. Kim Bong-jin, chairman of Woowa Brothers, will serve as the chairman and CEO of Woowa DH Asia. Jakob Angele, CEO of Foodpanda Asia, and Sean Oh, currently CFO of Woowa Brothers, are expected to be appointed as co-CEOs of Woowa DH Asia.

A Woowa Brothers official said, "Taking this corporate merger as an opportunity, we will do our best to pioneer the Asian market," and emphasized, "We will become a company that expands globally based on Baemin's successful experience in Korea." The official added, "We will be a responsible company that provides more benefits to consumers, restaurant owners, and riders, and contributes to job creation."

DH CEO Niklas ?stberg said, "This merger approval is good news for everyone in the delivery industry," and added, "The joining of Woowa Brothers employees, including CEO Kim Bong-jin, brings us tremendous experience and will be an opportunity to expand and strengthen our presence across Asia." However, CEO ?stberg expressed deep regret about having to sell Yogiyo, saying, "I feel deep sorrow about the condition to sell our subsidiary DHK in Korea," and personally thanked DHK for years of collaboration and exploration to create an amazing customer experience.