Delivery Hero will acquire South Korea's largest food delivery company for $4 billion, the companies have announced.
The German firm will acquire an 87% stake in Woowa Brothers, which runs Korea's most popular delivery app Baedal Minjok.
The stake is currently owned by various investors and private equity groups such as Goldman Sachs, Hillhouse Capital, and Sequoia Capital, as well as Singapore's sovereign wealth fund GIC.
The remaining 13%, owned by founder Kim Bong-jin and Woowa Brothers' management, will be converted into shares of Delivery Hero, they said. Kim, who is the largest personal shareholder, will become a member of a three-man global advisory board at Delivery Hero.
Delivery Hero and Woowa Brothers will also form a 50/50 joint venture, dubbed Woowa DH Asia, at Singapore. The new joint venture will be used as a base to expand its operations. Kim will be the chairman of the joint venture and oversee Delivery Hero's operations in 11 Asian countries.
Delivery Hero already operates its own food delivery app in South Korea via its local subsidiary RGP Korea. RGP Korea runs the country's second most popular delivery app Yogiyo.
The acquisition of Woowa means the German company will effectively run two of the most popular food delivery apps in South Korea, with both holding a combined market share of nearly 90%.
The deal still needs to receive approval from Korea's Fair Trade Commission before it can go ahead.
Woowa has been expanding its food delivery operations in the country and recently launched delivery and service robots in local restaurants.
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