Delivery Hero expands in Asia with $4bn South Korean buyout

European food delivery company Delivery Hero expanded its footprint in Asia with a $4bn buyout of a South Korean start-up as it moved to become more competitive in the region.

The deal was signed in Seoul on Friday to take over Woowa Brothers, the company behind South Korea’s most popular food delivery app. The South Korean group owns Baedal Minjok, an app known as Baemin.

“Cut-throat competition against companies with large [amounts of] capital will eventually lead to co-destruction. So, we decided to partner with Delivery Hero,” said Bong Jin Kim, Woowa Brothers’ founder.

Delivery Hero will pay $3.48bn for the 87% of the Seoul-based company owned by outside investors. The deal values Woowa Brothers at $4bn.

The investment intensifies the rivalry between the German group and the region’s big incumbents, including SoftBank-backed Grab and Indonesia’s Go-Jek.

With the deal Kim will manage Delivery Hero’s business across Asia, including the 11 countries the company already has a presence in, as well as Woowa’s existing operations in South Korea and Vietnam.