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Wednesday, 26 June 2019

UAE authorities greenlight Uber-Careem merger, Egypt’s ECA yet to decide

UAE authorities greenlight Uber-Careem merger: Emirati Minister of Economy Sultan bin Saeed Al Mansouri has given “unconditional approval” to Uber’s planned USD 3.1 bn acquisition of Careem, Uber announced yesterday (pdf), making it the first jurisdiction to sign off on the transaction.“The integration of expertise, competencies and modern technologies ultimately serve[s] the interests of consumers,” reads the ministerial decree. The Emirati ministry sees the move as beneficial to the wider economy, saying it will lead to a more efficient transportation network, improve the region’s tech ecosystem, contribute to a “more dynamic” competitive landscape, and send a “globally visible” endorsement letter to prospective investors.

Egypt’s competition watchdog hasn’t been as welcoming of the merger: The Egyptian Competition Authority (ECA) has been a critic of the merger since before Uber and Careem announced they were in talks for the transaction, threatening each company with a fine of up to EGP 500 mn at the time. The ECA said that the agreement could “lead to a significant impediment on effective competition in the markets” and said it would take a decision after 60 working days of receiving official confirmation of the merger.

Glovo’s return will go down as a win for the ECA: The authority said in a statement yesterday (pdf) that it had received an official letter from delivery app Glovo and partial owner Delivery Hero confirming that both will operate in Egypt “in accordance with the Antitrust Act.” Glovo, which reversed last week an earlier decision to exit Egypt, told the authority it will reactivate its app and advertise its return. Delivery Hero, meanwhile, pledged not to exploit the access it has through its partial ownership of Glovo or exchange classified strategic information that may run in violation of the act.

Background: Glovo’s decision to exit Egypt last May came immediately after it secured a EUR 150 mn series D funding round led by Lakestar. The app then began directing users to Otlob, the food delivery app owned and operated by Delivery Hero. The ECA then ordered the company to return, accusing it of a deliberate, anti-competitive arrangement.

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