Mexico‘s Federal Economic Competition Commission (Cofece) approved the merger between Uber Freight and Tupelo Aggregator.

To begin with, on July 22, 2021, Uber Freight Holding Corporation (Uber Freight), a subsidiary of Uber Technologies (Uber), announced that it had entered into a stock purchase agreement, by and between Uber Freight, Uber, Tupelo Parent, a Delaware corporation that operates Transplace (Tupelo), and Tupelo Aggregator LLC, a Delaware limited liability company (Seller).

Among other things, the Share Purchase Agreement provides that, subject to the terms and conditions set forth therein, Uber Freight will purchase all outstanding Tupelo shares from Seller for a total consideration of $ 2.25 billion, subject to certain adjustments. , in the form of cash and up to $ 750 million in Uber common stock.

Uber reported at the time that it expected to fund up to $ 1.5 billion of the cash consideration through Uber’s bond issuance prior to the closing of the transaction.

Uber Freight

Then, on August 11, Uber, Uber Freight, Tupelo Aggregator, Tupelo Parent, notified Cofece of their intention to carry out a concentration, in accordance with the provisions of article 90 of the Federal Economic Competition Law (LFCE).

The Cofece is in charge of the prevention of concentrations whose object or effect is to diminish, damage or impede competition and free competition.

Likewise, it is empowered to challenge and sanction those concentrations and legal acts derived from them, whose object or effect is to diminish, damage or impede competition and free competition, in the production, distribution and commercialization of goods and services in Mexico.

In Mexico, the operation implies that Uber Freight is the indirect owner of the following Mexican subsidiaries of Transplace:

• Transplace de Mexico.
• Servicios Transplace
• Laser Ramos Gil.
• USCS.

From the analysis carried out by Cofece, it is considered that, if the notified operation were carried out, it would have little probability of affecting the process of free competition and economic competition.

In July 2018, Uber Technologies created a new majority-owned subsidiary, Uber Freight Holding Corporation.

The purpose of Freight Holding is to conduct the business activities of the Freight operating segment.

Uber Technologies’ shares of Freight Holding were then determined to be variable interest.

Freight Holding is also considered a Variable Interest Entity, because it lacks sufficient capital to finance its activities without future subordinated financial support.