Mexico puts brakes on Walmart's Cornershop acquisition

Mexico's anti-trust regulator Cofece has blocked Walmart Inc's US$225mn acquisition of grocery delivery app Cornershop, which was expected to speed up deliveries for WalMart de México, the country's largest retailer.

The regulator said it made the decision based on the risks to competition in the country's retail delivery market, including the possibility that Cornershop could refuse to offer services to Walmart competitors, or that the giant retailer could pull its products from the app's competitors.

Cofece said the measures proposed by Walmart and Cornershop to mitigate the risks were insufficient.   

“We are analyzing the scope of this resolution and the measures we will adopt, since we are sure that this operation is positive for the competitive environment and for the consumer, and that it drives the development of e-commerce in Mexico,” Walmart’s local unit said in a statement to Mexico’s stock exchange BMV.

Cornershop CEO Oskar Hjertonsson reacted to the announcement on social media, where he took things in stride. "A rabbit is pulled from a regulatory hat... and now what? Keep Calm and Order Avocados," he tweeted.

The app operates in eight Mexican cities and three in Chile, its home country. Chile's anti-trust regulator FNE has signed off on the deal.

The platform has 6,000 active Mexican shoppers, the people who purchase the groceries and deliver them to the user's home. In Chile it has 5,000 shoppers. 

Cornershop, which does not reveal its number of users, reportedly has partnerships with 150 stores in both markets.