COFECE, La Comisión Federal de Competencia Económica, or the Mexican economic competition authority, notified Walmart Inc today that it is “opposed” to Walmart’s landmark acquisition of Cornershop. The deal was first reported in June 2018 and publicly announced in September 2018 and had already passed a similar process in Chile.
Walmex, WalMart’s Mexican subsidiary, released a statement:
We’re analyzing the decision and the measure’s we’ll take, since we’re sure that this operation is positive for consumers’ competitive environment and will help foment the development of e-commerce in Mexico.
This deal was hailed as a landmark deal in Latin America, both in Mexico and in Chile and it remains to be seen what the fallout will be both from US based and Latin American investors, along with Latin American entrepreneurs.
“We believe that this will be a negative signal for Latin American startups, but will not affect the fundamentals of the region: startups are growing quickly and changing Latin American economies,” said Pedro Pablo del Campo, a partner at Magma Partners, a US/Latin American venture capital firm.
It will be interesting to see the market’s reaction, along with how it will affect Rappi and their recent $1B investment. Oskar Hjertonsson, CEO and cofounder of Cornershop took an upbeat view with this tweet: