GS Retail Co LTD has partnered with two private equity firms to buy Yogiyo, the number two online food delivery app that Germany’s Delivery Hero acquired before them.
South Korea’s antitrust watchdog required Delivery Hero to sell Yogiyo next year after it acquired a controlling stake in Woowa brothers, which operates its top delivery app Baedal Minjok, or Baemin, two years ago.
GS Retail joined hands with two private equity firms
The consortium, which includes PE firms Affinity Equity partners and Permia, has reached a deal with Delivery Hero Korea, which operates the delivery app, to acquire a 100 percent stake in Yogiyo. The deal is valued at 800 billion won ($685 million), GS Retail said on Friday.
GS Retail will take over 30 percent of the share with an investment of 300 billion won in total, with 240 billion won being the share price, with an additional 60 billion won for the planned capital increase of 200 billion won.
GS Retail expects to create a synergy between Yogiyo with its existing business
The company said it decided to join the buyout of Korea’s second-biggest delivery app to combine its popularity as a delivery app with its 16,000 retail outlets, including its convenience stores and 60 logistics centres, to deliver a range of their products.
The deal is expected to further intensify the competition in the world’s third-highest online food delivery market. It will have to face formidable competitors such as Woowa Brothers’ app Baemin, and Coupang Eats, the food-delivery side of e-commerce leader Coupang, the number three food delivery app that has seen staggering growth since its launch in 2019.
Amidst the pandemic, as more and more people refrained from eating out, the food delivery app market of south Korea grew exponentially, thus putting its value at 10 trillion won last year.