After the Saudi General Authority for Competition (GAC) initially provided no inside on why it end of 2021 blocked the acquisition of the Saudi food delivery company Chefz by Delivery Hero. Now in a TV interview the head of the GAC's mergers and acquisitions department—Talal Alhogail—discussed the transaction, which was the first transaction ever opposed by GAC under the new Saudi merger control regime that came into force in September 2019.
GAC blocked Delivery Hero's acquisition of the Chefz in late 2021. Initially, the reason stated was that Delivery Hero was late in responding to an RFI issued by GAC. This decision to oppose a transaction for a party responding to an RFI late, raised concerns among companies that GAC may take excessive measures to address rather minor issued. Furthermore, suspicions arose that the deal may have been blocked to ensure the Chefz—often considered a Saudi start up champion—remained in Saudi hands.
Interest in the blocked transaction rose again after GAC cleared the acquisition of the Chefz by Jahez, a Saudi platformed specializing in delivering restaurant orders. In a recent interview Talal Alhogail discussed the two transaction. He stated that the reasons for GAC opposing the Delivery Hero acquisition of the Chefz because of (1) concerns that Delivery Hero's stake in Hunger Station, a Saudi online food ordering portal, posed competition concerns, and (2) Delivery Hero's failure to cooperate with GAC in their review of the transaction.
While welcome, these explanations still leave some questions unexplained. In particular, it remains unclear whether there would have been milder remedies to address Delivery Hero responding late to an RFI and whether the (potential) competitive impact of the transaction considering Delivery Hero's engagement in Hunger Station could not have been addressed by providing conditional approval. In particular, since GAC now provided conditional approval to the acquisition of the Chefz by Jahez.
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