- Uber is still waiting for Cofece to authorize the acquisition of the Chilean startup Cornershop;
- Cofece is the Federal Commission on Economic Competition of Mexico;
- Uber first announced the deal in October 2019;
- In June 2020, the legal entity responsible for the approval in Chile (FNE), authorized the acquisition.
More than a year has passed since Uber first announced the acquisition of Chilean grocery delivery app Cornershop, back in October 2019.
But although the tech giant has received the green light from Chile’s National Economic Prosecutor’s Office (FNE), as well as from other Latin American markets and the US; in Mexico, the purchase is still awaiting approval from the Federal Commission on Economic Competition (Cofece).
“The extended uncertainty that follows these long resolution times has a substantial impact on the entrepreneurial ecosystem, starting with the same startup Cornershop, a company that after five years of operation, is without financing, without the ability to reach more consumers,” Uber declared to Mexican newspaper Expansión.
“The delay could not only jeopardize startups looking for an opportunity in the country, but it also sends a negative signal to foreign investment by undermining business confidence and the execution of investment plans,” the company added.
The pending decision of Cofece on the issue has to do with deliberating whether or not the operation represents a concentration of competition in the delivery market by Uber. Factors such as a legal process started in November 2019 to resolve which autonomous entity (IFT or Cofece), would have jurisdiction over this case, coupled with the COVID pandemic and the delay in judicial processes have lingered the decision.
Uber warns that a favorable ruling by the regulator may contribute to a greater attraction of investment by the San Francisco-based company.
“This, in turn, will help attract foreign capital, starting with strong investments from Uber in Mexico, which will boost our economy. Likewise, the concentration of Uber and Cornershop will allow the expansion of the food purchase and delivery company, and with it the generation of thousands of flexible self-employment opportunities,” Uber further stated.
Cofece’s approval for the deal is expected to be issued by the end of 2020. The Federal Commission on Economic Competition of Mexico is the same entity that rejected the merger of Cornershop with Walmart back in 2019.