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Taiwan, home to the local companies involved, has blocked Uber Technologies' (UBER, Financial) proposed $950 million acquisition of Foodpanda's local delivery business, citing anticompetition concerns. According to the FTC's decision, the merger would significantly lessen competition in the Taiwan food delivery market, reducing competition that now presses Uber's delivery unit, which is led by Dara Khosrowshahi, Foodpanda. The FTC warned that this could mean higher prices for consumers and eateries and barriers to entry for new entrants into the market.
Uber expressed disappointment with the ruling and said it made previous proposals aimed at addressing the FTC's concerns. However, the setback came as the company said it would still keep investing in Taiwan, one of its fastest-growing markets for food delivery.
The deal was first announced in May. At the time, Uber was buying Foodpanda's Taiwan business for $950 million and making an additional $300 million investment in Foodpanda's parent company, Delivery Hero. Uber had expected the acquisition to bolster its delivery operations in Asia and would help generate earnings of at least $150 million annually over the first year of completion. It would have been a big international acquisition in Taiwan, away from the semiconductor industry.
Delivery Hero said Uber could appeal the decision or end the deal, but the future of the acquisition is now uncertain.
This article first appeared on GuruFocus.