Abandoned Grab-Delivery Hero Deal Got Attention of Singapore Regulator

A now-abandoned deal between two food delivery giants got the attention of Singapore’s competition watchdog.

The Competition and Consumer Commission of Singapore (CCCS) said Monday (April 1) that it opened an investigation into Singapore-based delivery/ride-hailing giant Grab Holdings’ plans to acquire Delivery Hero’s business in Southeast Asia.

“At the time, CCCS had reason to suspect that the possible transaction might result in a substantial lessening of competition in the market for the supply of online food ordering and delivery services in Singapore, which is characterized by few large players, high entry barriers and strong network effects,” the regulator said on its website.

The CCCS ultimately abandoned its investigation when Delivery Hero called off plans for the sale. The regulator said it will “continue to monitor market practices and will take necessary action to protect the market against mergers or acquisitions which may substantially lessen competition in Singapore.”

Berlin-based Delivery Hero had planned to sell its foodpanda business but announced in February that it had terminated negotiations for the deal, which would have covered Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar and Laos. That announcement came weeks after the company said it was optimistic the deal would close.

“At that time, the company believed it had reached an alignment with the potential buyer on the fundamental terms regarding the sale of the business,” Delivery Hero said in a statement Feb. 21. “However, Delivery Hero took the decision to withdraw from negotiations as this is no longer the case.”

The company, which acquired foodpanda in 2016, said at the time it remains open to merger and acquisition activity, as long as such deals can generate shareholder value.

Grab’s expansion plans have gotten the CCCS’s attention before. Last year, the watchdog announced it had concerns about Grab’s plan to acquire Singapore’s third-largest cab company, Trans-cab.

“Third-party feedback received by CCCS suggests concerns on the effect of Grab’s ownership of the Trans-cab fleet on Trans-cab drivers’ usage of rival ride-hail platforms, which may raise barriers to expansion and entry for Grab’s rival ride-hail platforms,” the CCCS said.

In February, the CCCS said it had begun an examination of the proposed Trans-cab acquisition after reviewing documents from the companies and concluding that it could not confirm the deal would not lead to competition concerns.