[서울=뉴스핌] Reporter Nam Lada = As German Delivery Hero (DH) decided to sell’Yogiyo’ after accepting the approval of a conditional merger from the Fair Trade Commission, the industry’s attention is focused on changing the market for delivery applications (delivery apps).
The sale price of Yogiyo is expected to reach 2 trillion won. Not only e-commerce companies such as Coupang Itz and Wemakepo, which threaten the delivery app market, but also large distribution companies or IT companies with sufficient funding are mentioned as candidates for the acquisition. However, some are predicting the possibility that DH will sell it to a private equity fund to defend its market share. In this case, the common view of the industry is that the impact on the delivery app market is not so great.
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| [서울=뉴스핌] Reporter Baek Hyuk = Service General Union Delivery Service Branch Bae Min (Baedal People) Riders members hold a rally for the right to work safely in front of the company with the Democratic Party in Yeongdeungpo-gu, Seoul on the afternoon of the 1st of May Day Labor Day, the 130th anniversary. On this day, members of Baemin Riders held the first motorcycle parade, urging for the right to work safely, enacting the Living Logistics Service Act, and lowering motorcycle insurance premiums. 2020.05.01 [email protected] |
◆FTC “If you want to take over Baemin, sell Yogiyo”…DH,’knee’ to the FTC super strong
DH announced its official position late on the evening of the 28th that it would sell 100% of its shares in Delivery Hero Korea (DHK), a Yogiyo delivery box operator.
DH expects to receive final approval for the acquisition of Baemin from the FTC in the first quarter of next year. DHK also released its position data on the day and said, “The specific sale plan will take some time,” and said, “We will do our best to share the whole process of the sale transparently with employees and fully support the employees.”
This is because the FTC concluded that DH had conditional approval to sell DHK shares to a third party in order to acquire about 88% of the shares of’Elegant Brothers’ who operate the delivery app delivery people (Bae Min).
Earlier, on December 13 of last year, DH purchased 88% of the stocks of elegant brothers for 4.4 trillion won, and reported a business combination to the Fair Trade Commission on the 30th of the same month.
It is interpreted that the FTC is concerned that a merger between Bae Min and Yogiyo will result in a monopoly operator with a market share of 99%, so M&A is virtually impossible.
Last year, Baemin accounted for more than two-thirds of the delivery market share of 78% in terms of transaction volume, followed by Yogiyo 19.6%, Delivery Box Food Fly (DHK operation) 1.6%, and other businesses such as Coupang Itz, Kakao, Wemepo, etc. It was in the order of 0.8%.
The FTC believes that if DH acquires the position as a delivery app monopoly, there is a concern that it may limit competition in the delivery app market, such as reduced consumer benefits and increased restaurant fees. FTC simulation results also confirmed that consumers are likely to continue to use the two delivery apps, Baemin and Yogiyo, even if fees increase after the merger.
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| [서울=뉴스핌] Reporter Nam Lada = Market share of delivery apps last year. [자료=공정위] 2020.12.28 [email protected] |
The FTC also issued a corrective order to DH to sell its stake in DHK within the next six months.
The company made a plan to accelerate its entry into the Asian market by reinforcing synergy between Bae Min, the No. 1 delivery app provider, and Yogi-yo, the No. 2 delivery app provider, but as the Fair Trade Commission puts a brake on the merger, it looks like things are actually gone.
As the intention of acquiring Baemin has faded in the industry, the prospect that DH will not accept the FTC conditional approval has prevailed.
Initially, DH made clear the opposite position, saying, “I disagree” with the FTC’s review report on the condition of’selling Yogiyo’. Last month, DH said on its website, “(If the sale of Yogiyo is conditionally approved), the basis of the delivery hero to improve the customer experience of Korean users through the synergy of business combinations may be weakened.” “Restaurant managers, riders and consumers It doesn’t help everyone in the community, including,” he publicly refuted.
However, it is known that DH adhered to the position that “the business combination must be approved without conditions” at a later plenary meeting of the FTC. However, it was reported that he eventually accepted the condition of’Yogiyo sale’ as he failed to persuade the FTC.
The dominant opinion is that DH chose to have an advantage in terms of market share that gave up Yogiyo with Baemin. The market share gap between Bae Min and Yogi-yo has widened more than three times as of last year.
Yogiyo, the ransom is only 2 trillion won…Who is in your arms?
The sale price of Yogiyo is estimated at W2tr. DH must find a new owner of DHK within the next six months.
Currently, candidates for Yogiyo’s acquisition include large distribution companies and IT-based companies Naver and Kakao, delivery app latecomers Coupang (Coupang Itz), and WeMef (WeMepO).
If Coupang and WeMef, who recently dominated the delivery app market, acquire Yogiyo, they can quickly rise to the second place in the industry. This is the biggest enemy to threaten Baemin. However, Coupang and WeMef don’t have much funding.
Considering that Coupang has the homework to reduce its deficit of 7 trillion won for listing on the NASDAQ next year, it is unlikely to jump into the takeover. The transfusion of funds from Softbank Group Chairman Son Jeong-eui, who was a strong friend, is also difficult.
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| Yogiyo CI [사진=딜리버리히어로코리아 홈페이지 갈무리] 2020.06.02 [email protected] |
The Vision Fund, led by Son, has not been able to afford additional investments as losses have increased due to successive investment failures. At the end of last year, WeMef had only 477 billion won in cash equivalents, so it is unlikely to be added before the acquisition.
The industry believes that DH is highly likely to choose a’private equity’ instead of a retail and IT conglomerate card to defend its market share. It is predicted that the company will choose a company with a high selling price to make up for it as much as it has made a large-scale investment of 4.7 trillion won in the acquisition price of Baemin.
In addition, private equity funds are likely to focus more on financial soundness by focusing on investment recovery rather than external expansion. This is because even if the private equity fund enters the delivery app market, it does not appear to threaten Baemin’s market position.
An industry insider said, “Considering the increased uncertainty at home and abroad in coronavirus emergencies, there is a possibility that private equity funds will be less expensive than large companies.” I will judge.” He predicted, “If the private equity fund is acquired, the structure of Baemin and Yogiyoga, which are currently ranked first and second in the industry rankings, will remain unbroken, without any change in the industry.”
There are also many prospects that large corporations will be skeptical about investment. Yogiyo’s cumulative deficit, which amounted to 7 trillion won as of last year, is also due to the problem that it can act as a financial burden.
It is clear that there is a positive factor that can enjoy special benefits as delivery demand explodes in the aftermath of Corona 19. However, as there is a possibility that profitability may deteriorate due to intensifying competition in bleeding, there is a negative evaluation of investing 2 trillion won worth of funds.
An official from the e-commerce industry said, “Large distribution companies and large companies such as Naver and Kakao will have enough funding, but direct transactions with small business owners will be very burdensome as there may be constant noise.” Considering that it is an emergency situation, it will not be easy to actively plunge into the acquisition.”