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European food ordering and delivery giant Just Eat Takeaway has revealed that it’s selling its stake in Brazil’s iFood for up to €1.8 billion ($1.8 billion) to Prosus.
The initial deal will amount to €1.5 billion in cash, plus another €300 million depending on the performance of iFood over the next 12 months.
News of the pending deal sent Just Eat Takeaway’s shares soaring 25% to more than €21 in early trading on the Dutch Euronext Amsterdam stock exchange.
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Founded in 2011, iFood operates mainly in Brazil and Colombia, and had raised nearly $600 million in funding since its inception — with Just Eat Takeaway investing across three separate funding rounds, securing around 33% of the business in the process. Prosus, a Dutch multinational conglomerate owned by Naspers, and its Brazilian affiliate Movile owned the remaining shares, and as a result of this transaction, Prospus and Movile will own iFood in its entirety.
While Just Eat Takeaway said that its iFood equity value has increased five-fold over the lifespan of the joint venture, the sell-off comes amid troubling times for the company, which resulted from a $7.6 billion merger between the U.K.’s Just East and Dutch rival Takeaway.com back in 2020.
After its valuation plummeted more than 80% in 10 months, news emerged last month that Just Eat Takeaway was scaling back in France, resulting in 390 layoffs. And less than a year after its $7.3 billion Grubhub acquisition finally closed, Just Eat Takeaway revealed it was looking to offload Grubhub as part of a broader pursuit of “sustainable, profitable growth.”
The company said today that it plans to use its iFood proceeds to strengthen its balance sheet, while also honoring repayments on upcoming debt maturities. It also confirmed that it “continues to actively explore the partial or full sale” of Grubhub.
“Just Eat Takeaway remains focused on improving its profitability and on a disciplined allocation of capital,” the company wrote in a statement.
While the sale is still subject to stakeholder approval at an upcoming Extraordinary General Meeting (EGM), Just Eat Takeaway said that it expects the transaction to be approved before the end of 2022.