Mexico blocks Walmart’s delivery app buyout deal on competition ground

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Mexico blocks Walmart’s delivery app buyout deal on competition ground

Officials of Mexico’s far-right wing government, led by PM Andreas Manuel Lopez Obrador, had blocked world’s largest company in terms of revenue, Walmart Inc., headquartered in Bentonville, Arkansas, from pushing ahead with a buyout deal of a delivery app Cornershop, while a spokesman for Mexican anti-trust authority had been quoted saying that the No.

2 US e-commerce giant, Walmart Inc, had botched to convince policymakers a level playing field for rival retailers, an official document seen by a press agency and an interview with a top Mexican competition regulator had revealed on Saturday, the 15th of June 2019.

Prior to regulatory obstacles, Walmart Inc. had stamped a $225 million buyout deal for the popular delivery app, Cornershop, which had been operating in Mexico and Chile, providing delivery of goods within an hour of placing an order from retailers including Walmart, Chedraui and Costco Wholesale Corp.

Although, the Cornershop purchase deal would have proffered competitive advantage to Walmart while ramping up its e-commerce ambitions in Mexico, but the deal would likely to put Walmart in an awkward position, as in effect, it would allow Cornershop to delivery its parent organization, Walmart Inc.’s goods alongside goods of Walmart’s rival with potential access to data about orders placed by its competitors.

In order to avert such twist and red flag over Mexican e-commerce industry, after months of analysis, the Federal Economic Competition Commission (Cofece) had opposed the deal last week, while officials of Cofece said that the deal would displace competitors.