THE deal between Grab Holdings Ltd and Delivery Hero on the sale of the latter’s foodpanda business in Southeast Asia has reportedly collapsed due to issues concerning pricing.
People familiar with the matter said both parties were unable to agree on the Frankfurt-listed Delivery Hero’s “sky-high” valuation, according to a Business Times report.
They also said the sum requested by Delivery Hero was “too high” amid Grab’s current aim to turn a profit.
Grab is also shifting its focus to enhance its ride sharing services in Singapore.
Business Times had previously reported that the price issue had dragged the timeline of the deal to the first quarter of this year.
Delivery Hero, responding to a report by German business magazine Wirtschaftswoche concerning the matter that was published on Sept 20, 2023, had confirmed that it was indeed in talks of a partial sale of its business in Southeast Asia.
In the announcement, Delivery Hero says it is currently in early stages of negotiations to sell its Foodpanda food delivery brand in Singapore, Malaysia, Philippines, Thailand, Cambodia, Myanmar and Laos, though it did not mention the name of the potential buyer (or buyers).
However, Wirtschaftswoche had believed that the company’s rival Grab is the likeliest candidate for the deal.
Citing sources familiar with the matter, the publication says the Singapore-based multi-service and superapp operator could pay a little more than 1 billion euros to Delivery Hero for its Foodpanda businesses in the aforementioned seven Southeast Asian countries.
The possible sale raised concerns on monopoly by the Singapore-based company in the p-hailing (delivery of food, drinks and packages) sector.
Calls were made for the Malaysian Competition Commission (MyCC) to investigate the matter.
Speaking to Business Times, Malaysian Institute of Economic Research economist Dr Shankaran Nambiar said a sale to Grab was a matter for MyCC’s consideration and that there was a possible danger that Grab would acquire excessive monopoly through its acquisition of the business.
“However, if Grab does not in any way reduce competition, increase entry barriers and raise prices, then Grab cannot be held responsible for abusing its position,” Shankaran was quoted as saying by the business news portal.
“We do have a competition policy and competition laws. If there is anything to be done, it would be to empower MyCC further.” – Feb 2, 2024
Main pic credit: Media Variasi
