government in chile delays uber’s acquisition of cornershop
Contxto – Cornershop, the Chilean/Mexican startup, is once again expanding throughout Latin America. On January 20, it finally entered the Colombian market. Then as of January 30, it’s fully-operating in São Paulo, Brazil.
And yet, in other Cornershop-related news, the unicorn’s plans to be acquired by Uber were recently dampened. This, following the Chilean government’s regulating body on antitrust and free competition, the FNE for its Spanish acronym, postponed the deadline for its ongoing investigation into the acquisition.
These authorities stated that the acquisition may “significantly reduce competition.”
Related article: Cornershop and Domicilios.com to clash with Rappi for Colombia
Cornershop in Colombia and Brazil
As you may recall, Cornershop can already be found delivering groceries in Peru, Canada, and of course, Mexico and Chile.
As per these recent developments, Colombia is added to the list. Moreover, users in São Paulo can now also complete their grocery shopping via the platform thanks to Cornershop’s partnership with Supermercado BIG.
Regardless, it’s not one to stay idle.
The startup plans to increase its presence in that country, reaching the cities of Curitiba, Porto Alegre, and Rio de Janeiro during March and April of this year.
In Brazil, it will have to compete with other grocery delivery businesses such as the recently acquired Supermercado Now.
Related article: Uber to purchase majority stake in Cornershop for US$450 million
Will the acquisition ever happen?
Cornershop hasn’t had it easy in its search to be acquired. In June of last year, Mexican authorities rejected Walmart’s acquisition of the startup on the grounds of antitrust legislation.
That didn’t discourage leadership.
A couple of months later, in October of 2019, it was announced that Uber would be buying a majority stake in the startup. The price tag was around US$450 million. An improvement on what Walmart had offered at US$225 million.
But on February 7, Chilean authorities stepped in.
The government stated that more time was required for its investigation. Obviously, this means its approval is on hiatus. It appears that its antitrust body is concerned that Uber’s absorption of the startup will eat too large a portion of the overall market and cut others out.
So as part of the second phase of the ongoing investigation, until March 6, third parties are welcome to present precedents about Cornershop’s business. Whether from the consumer’s or competition’s side, the government wants to hear about it.
Will Cornershop once again be benched?
Wanna hear more? We recommend you listen to the following podcast episode: El capital de riesgo desde los ojos de Ualá. You can find the time stamp available in the description.
Related articles: Tech and startups in Chile!
-ML
