Reported by Business Times, Meituan’s recent announcement of not pursuing the acquisition of foodpanda has come as a significant relief for Grab. This decision by the Chinese food delivery giant has lifted a major concern for Grab’s stock prices.
Rumors had circulated that Meituan, a leader in China’s food delivery sector, might acquire foodpanda. These speculations led to a 10% drop in Grab’s stock price over two weeks. Now, with Meituan stepping back, DBS Group Research anticipates a ‘relief rally’ for Grab.
DBS points out that foodpanda’s delivery-only business, especially in regions where it doesn’t operate like Indonesia and Vietnam, is relatively small. It represents only about 5% to 6% of China’s delivery market size, hinting at limited strategic benefit for Meituan.
Meituan’s withdrawal from acquisition talks not only stabilizes Grab’s market position but also opens avenues for them to strengthen their foothold in the Southeast Asian market without the pressure of a new formidable competitor.