The Competition Council authorized on Friday the transaction by which Glovoappro SRL will take over Foodpanda Ro SRL and, indirectly, the Pandamart business, operated by Delivery Hero Dmart SRL. The Council, however, set a number of conditions.
The analysis carried out by the competition authority has raised concerns about the market power Glovo will acquire as a result of this transaction, in the context of its online food delivery platform business, and the effect this could have on its competitors’ access to customers, the Competition Council said in a statement.
As a result, the transaction was cleared subject to compliance with commitments given by Glovoappro SRL to remove the identified competition concerns. Thus, Glovoappro SRL undertakes not to impose exclusivity clauses in relation to partner restaurants and not to contractually condition the level of commissions paid by partner restaurants (current or future) on compliance with an exclusivity clause. Glovo has also undertaken not to penalize partner restaurants for joining another online ordering and food delivery platform. At the same time, the company will not renew contractual provisions whereby Foodpanda imposes exclusivity obligations on partner restaurants. The duration of these commitments by Glovo is 24 months from the date of completion of the transaction.
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In Romania, Glovo has been providing, since April 2018, online order pickup and delivery services of food from restaurants to consumers and, adjacent to this, order pickup and delivery activities of other consumer goods (such as: food, flowers, alcoholic beverages, and tobacco, pharmaceuticals, toys, baby care products, books, etc.) provided by vendors, such as supermarket chains or local stores.
Foodpanda Ro SRL and Delivery Hero Dmart SRL are part of a group of companies owned by Delivery Hero SE, Germany.
Foodpanda Ro SRL provides online order picking and food delivery services from restaurants via the Foodpanda online service (app and website). In addition, Foodpanda Ro SRL has recently included other consumer goods (such as food, flowers, alcoholic beverages and tobacco, pharmaceuticals, toys, baby care products, books, etc.).
Delivery Hero Dmart SRL was established in June 2020 and operates through “dark stores”, which are nearby storage spaces exclusively for the online sale of multi-category products via the platform, without physical retail space, this activity is at an early stage.
Delivery Hero signed on 26 May several agreements with the Spanish company Glovoapp23 for the sale of the company’s business in Romania, Bulgaria, Bosnia and Herzegovina, Croatia, Montenegro, and Serbia. The total value of the transactions amounts to €170 million.
Delivery Hero has held a stake in Glovo since 2018 and, at the time of the sale agreements, holds a stake of approximately 44%. Glovo is therefore considered a closely related business to Delivery Hero.
Under the terms of the sale agreements, Glovo will acquire the following from Delivery Hero:
– 100% of the share capital of Foodpanda Romania RO S.R.L (Romania);
– 100% of the share capital of Delivery Hero Bulgaria EOOD (Bulgaria);
– 100% of the share capital of Pluton d.o.o. (Serbia), which holds 100% of the share capital of Donesi d.o.o. Podgorica (Montenegro) and Donesi d.o.o. Banja Luka (Bosnia and Herzegovina);
– Certain assets of Delivery Hero Croatia d.o.o. (Croatia), consisting mainly of restaurant contracts and customer base;
– Certain assets of Delivery Hero Dmart S.R.L. (Dmart Romania), consisting mainly of rental contracts, contracts with food suppliers, furniture, and lighting fixtures.
The Delivery Hero platforms in the countries mentioned will be rebranded under the Glovo brand during a 6-month transition phase.
Deals in Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, and Serbia will be concluded in the coming weeks, subject to certain conditions being met.
The transaction in Romania is expected to close by the first quarter of 2022.