LatAm List – ASEM, a nonprofit organization that promotes and defends entrepreneurship in Mexico, announced its opposition to COFECE’s resolution in the following press release:
“From the Asociación de Emprendedores de México (ASEM), we strongly disagree with the resolution issued by the Comisión Federal de Competencia Económica (COFECE) with respect to deauthorize Walmart’s acquisition of Cornershop.
This resolution creates a lack of trust in investors, both local and foreign, and generates a climate of uncertainty in the middle of one of the most challenging moments for entrepreneurship in Mexico, where programs and budgets for the industry have been cut.
It is unfortunate that in Mexico, COFECE has taken more than 9 months to issue a resolution. In Chile, where Cornershop is more relevant than in Mexico, the acquisition was approved in only 6 weeks.
The commission needs to understand how startups work, otherwise we run the risk of ceasing to be attractive as a market and an investment destination. Among the interpretations, which go against market dependence, the ones that caught our attention were that, after the acquisition:
- “Cornershop could refuse to provide its service to Walmart competitors.” A statement with which we do not agree since it is an essential part of Cornershop’s value proposal and, in the case of refusal, it would end up losing in the long run.
- “Walmart can refuse to commercialize its products through other competitor platforms.” This can happen regardless of the acquisition.
- “It would have access to its competitors’ clients.” An argument that we find difficult to understand since you cannot attribute an investment of $225M in exchange for an insignificant amount of clients.
These types of operations are the goal of many entrepreneurs and investment funds, who seek capital to reinvest and create a multiplier effect. In this sense, the resolution discourages competition and innovation, which could end up affecting consumers.
From ASEM, we are convinced that we can attract investment, create employment and productive companies if we are capable of implementing the necessary incentives to transform Mexico into a better place to start a business. That is why we express our great disposition to collaborate with COFECE and all levels of government necessary, to help create a more dynamic start up ecosystem that will be the engine for economic growth and social wellness for all Mexicans”.
Learn more about the Cornershop acquisition:
The behind-the-scenes of the Cornershop acquisition
The fear of losing money is holding back Chilean VC, says Cornershop co-founder