Naver, which operates South Korea’s leading search engine along with major shopping and payment services, has abandoned a potential investment in Baemin, the country’s largest food delivery platform, ending months of discussions over a deal valued at as much as $5.7 billion.
The deal would have pushed Naver deeper into the daily spending habits of Korean consumers. Its services already play a role when people search for restaurants, shop online, make payments or use local maps, but food delivery remains one major area where the company lacks a dominant service of its own. A stake in Baemin could have connected that missing piece to Naver’s existing commerce and payment businesses.
That made the proposed acquisition more than a simple expansion into food delivery.
Naver has been trying to turn its large search audience into a broader commerce ecosystem, where consumers can move from discovering a product or restaurant to paying for it and receiving it without leaving the company’s services. Baemin would have accelerated that strategy by giving Naver access to an established delivery network and millions of existing users.
Naver said in a regulatory filing on Sept. 17 that it had reviewed acquiring a stake in Baemin but decided not to proceed because of changes in the business environment. The company did not provide further details about what led to the decision.
The review became public in May after reports said Naver and Uber were considering a joint acquisition of Baemin. The transaction was reported to be worth as much as $5.7 billion, with Uber expected to take an 80% stake and Naver the remaining 20%.
Baemin is operated by Woowa Brothers, whose largest shareholder is Germany based Delivery Hero. The service holds a leading position in South Korea’s highly concentrated food delivery market.
Naver said when the reports first emerged that it was examining various options to strengthen its competitiveness but that no transaction had been finalized.
The proposed deal also came as Naver faces growing competition from Coupang, the New York Stock Exchange listed commerce company that combines online shopping, rapid logistics and food delivery through Coupang Eats. Baemin would have given Naver an immediate presence in a business where Coupang has already built a significant position.
Naver’s decision means that expansion will not happen through Baemin. The company will instead have to continue building its commerce, payments and delivery strategy without acquiring South Korea’s largest food delivery platform.
