Technology investor Prosus on Friday said it will pay EUR 1.8 billion (roughly Rs 14,500 crore) to acquire a 33 percent stake in Brazil’s iFood from Just Eat Takeaway.com, which it does not already own. The deal will give Prosus sole control over iFood, which is considered one of the most lucrative food delivery businesses in the world’s largest markets. It also gives takeaways, which are racing to turn a profit, a significant cash infusion.
Prosus said it will pay EUR 1.5 billion (roughly Rs. 12,100 crore) in cash and an additional consideration of up to EUR 300 million (roughly Rs. 2,400 crore) for a 33 percent iFood stake. Europe’s largest meal delivery company, worth almost half the market capitalization of Takeaway and more than the market value of its rival Deliveroo.
“Increasing our stake to full ownership is a demonstration of our committed and disciplined approach to investment and reflects our belief in iFood’s long-term potential,” Process Chief Executive Bob Van Dyk said in a statement.
Takeaway, whose shares have lost two-thirds of their value over the past year, had long been trying to sell the iFood stake, but were unable to reach terms.
While they were partners in iFood, Prosus and Takeaway fought bitterly in a takeover battle for Just Eat in 2020, which Takeaway ultimately won.
Takeaway CEO Jitse Groen said in August 2021 that he had rejected a EUR 2.3 billion (roughly Rs. 18,500 crore) offer for iFood from an undisclosed bidder as “insufficient” due to rising valuations of food companies during the Covid-19 pandemic.
The takeaway price now “represents an equity multiple of more than five times” the company’s investment, it said.
According to a disclosure in Takeaway’s half-year results last month, iFood posted a net loss of around EUR 120 million (roughly Rs 1,000 crore) in the first half of 2022, even as sales grew 28 percent. Pross said iFood is making about 70 million deliveries per month.
The takeaway said the iFood deal will close in the fourth quarter and that it continues to explore a “partial or full sale” of Grubhub, the US food delivery company it bought for $7.3 billion (roughly Rs 58,200 crore) last year.
© Thomson Reuters 2022
