Dutch investment group Prosus bought a one-third stake in iFood from Just Eat Takeaway in a deal worth up to 1.8 billion euros (R$9.4 billion) — giving a vital cash injection to the company under pressure after the pandemic, with changing consumer tastes. With the transaction, Prosus acquires the remaining share it did not already own.
Prosus affiliate Movile will pay €1.5 billion (BRL 7.8 billion) in cash, with a further EUR 300 million (BRL 1.56 billion) depending on the performance of the online food delivery sector in next 12 months.
Just Eat’s share price jumped nearly 30% in early trading on Friday.
Just Eat has been hit by a slowdown in consumer demand, as the public has reduced spending on “to-go” food amid the cost-of-living crisis. The company reported a 7% drop in orders in the first half of 2022 compared to the same period last year.
The London-listed group was forced to accept a smaller amount for its stake in iFood amid mounting financial pressures on the company. Earlier this month, the company reduced the value of its US subsidiary Grubhub by US$ 3 billion, just a year after acquiring the group for US$ 7.3 billion (R$ 37.89 billion). billion today).
Just Eat said last year it rejected a €2.3 billion bid for its stake in iFood, saying the amount was “simply too low”. It valued its investment in the Brazil-based business at €1.74 billion (R$9 billion) as of June 30 this year. Analysts previously suggested that iFood’s stake could be sold between US$1.5 billion (R$7.79 billion) and US$4 billion (R$20.76 billion).
On Friday (12), Just Eat said that the proceeds from the sale will help pay off debt and “maintain the strength of the balance sheet” of the company.
Just Eat shares have dropped nearly 80% in the past year, as investors pressured the company to sell assets to boost shareholder confidence.
iFood was founded in 2011. Just Eat merged its fledgling Brazilian subsidiary RestauranteWeb with iFood in 2014. The decision was seen as a blow, as the company has since captured 80% of the domestic market.
Prosus increased its position in iFood to 67% through the Brazilian internet company Movile, of which it is a majority shareholder, and has accelerated investments since 2013. Negotiations with Just Eat for its 33% stake began in 2020.
Last March, Uber Eats withdrew from the Brazilian meal delivery market amid fierce competition. Brazilian antitrust agency Cade has since banned iFood from signing exclusive contracts with restaurants after competitor Rappi filed a petition claiming the group’s practices were restrictive.
Michael Pooler collaborated, in Belo Horizonte. Translated by Luiz Roberto Goncalves
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
