No economic concentration in Grab-Uber deal, says Vietnam

21-Jun-2019 Intellasia | The Saigon Times | 6:02 AM Print This Post

The Vietnam Competition Council (VCC) has concluded that there are no signs of economic concentration in the merger between ride-hailing firms Grab and Uber after a closed-door meeting held on June 11, the local media reported today, June 19.

According to a statement released by the VCC, it has rejected the requests by the agencies concerned to impose sanctions on the acquisition deal, having studied and verified the facts of the case, collected testimonies and discussed the evidence.

The acquisition, transfer and takeover between the two enterprises fails to form economic concentration as defined by the Law on Competition and a government decree guiding the execution of the law, the statement noted.

The decision by the VCC will become effective 30 days from the date of the conclusion being signed. During the period, if there is no objection, the Vietnam Competition and Consumer Authority (VCCA) would pay a fee for the case to the State budget.

In December 2018, the VCCA announced that the Grab-Uber deal had violated the economic concentration rules provided in the Competition Law.

The combined market share of Grab and Uber in Vietnam at the time was over 50 percent, instead of less than 30 percent as claimed by Grab. Meanwhile, the law prohibits economic concentration if the combined market share of the participating enterprises in the relevant market is more than 50 percent.

Besides this, the Grab-Uber merger deal violated the rule on prohibited mergers and authorities were not informed of the merger as required by law.

Grab responded by saying it did not violate laws, claiming its market share was below 30 percent following the deal and citing differences in market share calculations between the company and the authority.

The VCC returned the case to the VCCA and asked the latter to clarify certain technical issues and define the benefits Grab could obtain from the acquisition. Following this, the VCC conducted the hearing.

In March 2018, Grab announced its acquisition of Uber’s operations in Southeast Asia, including Vietnam. The value of the deal was not disclosed, but as part of the deal, Uber now holds a 27.5 percent stake in the merged company.

Statistics of the Ministry of Transport showed that the total number of vehicles joining the ride-hailing platform was some 36,800 at the end of 2017, supported by 10 software providers. Of the figure, there were 6,000 Uber vehicles and 29,500 Grab vehicles.

After the acquisition, Grab may hold a 96.7 percent market share in terms of vehicle number.

https://english.thesaigontimes.vn/69189/no-economic-concentration-in-grab-uber-deal-says-vietnam.html

 


Category: Business, Vietnam

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