Coupang and Naver named as strong candidates to acquire Yogiyo

Scooters of Delivery Hero's food delivery business Yogiyo are parked in front of a restaurant in Seoul on June 2. / Korea Times file

By Kim Jae-heun

Coupang and Naver have emerged as strong candidates to take over Yogiyo, the country's No. 2 food delivery player, after the top antitrust watchdog ordered Delivery Hero to sell the delivery service.

The Korea Fair Trade Commission (KFTC) said last month that it will only recognize the merger between Delivery Hero and Woowa Brothers, the operator of No.1 food delivery service Baedal Minjok (Baemin), if the former sells Yogiyo.

Yogiyo accounts for 18 percent of the local market share and is considered an attractive acquisition for Coupang, according to industry officials. Coupang currently runs its own food delivery service, Coupang Eats, which comprises a 3.1-percent market share to rank third-largest.

Yogiyo has an estimated market value of 2 trillion won, excluding control premium. Considering the estimated acquisition price, Coupang, Naver and Kakao have been mentioned to private equity funds (PEFs) as potentially viable candidates for acquisition of Yogiyo.

Coupang said it has no plans to acquire Yogiyo at the moment. Both Naver and Kakao declined to comment.

However, an industry source said the three are simply taking defensive measures.

“As platform operators, it is evident that Coupang, Naver and Kakao are brought up as strong candidates. The food delivery service market has huge growth potential and for Coupang, Yogiyo is an especially attractive firm as it can achieve synergy with its own delivery service,” an industry source said.

Domestic retail giants like E-Mart and Lotte are also tapped as possible candidates to take over Yogiyo. E-Mart is said to have started internally reviewing that possibility.

“We are just being mentioned as one of the candidates but we have no actual plans to do this,” an E-mart official said.

Delivery Hero has six months to sell Yogiyo. The FTC ordered the German firm to divest its food delivery business and added it can give one six-month extension to this deadline only under certain circumstances, such as the firm failing to find a buyer after the first six months.

Delievery Hero said it will first settle the deal merging with Woowa Brothers within the first quarter of next year and then proceed with selling off Yogiyo afterwards.

“Until Delivery Hero sells Yogiyo, it will operate both Yogiyo and Baemin. It can delay the sale of Yogiyo and raise the market share of Baemin to the fullest. Or it can try to combine with another food delivery player while its market share grows in the meantime. The KFTC needs to supervise the German firm closely,” an industry source said.