Investments

As the takeaway boom wanes, Prosus will pay €4 billion to acquire Just Eat

By Kaylie Pferten 04 Mar, 2025
As the takeaway boom wanes, Prosus will pay €4 billion to acquire Just Eat
A Dutch competitor has acquired the food delivery service Just Eat

The industry may now undergo additional consolidation.

According to Jasper Jolly of the Guardian, Prosus "snapped up" food delivery business Just Eat for £41 billion in cash two months after it delisted from the London Stock Exchange. At its three-month high, the deal is a 22 percent premium.

The stock is currently worth less than 5% of its 2020 peak value of over 100, though. Over the last five years, "several missteps" have caused Just Eats' share price to decline, most notably the "disastrous" acquisition of its US rival GrubHub during that time. Just Eat disclosed a few months ago that it was selling GrubHub for £650 million, which was a small portion of the £7.3 billion purchase price.

According to Matthew Field of the Telegraph, Just Eats' "botched US expansion" isn't the only factor contributing to its current low price. Another factor is that the "Covid-era boom" in ordering takeaways has faded. As a result, Just Eat is currently "battling for market share in the fiercely competitive food delivery market in the United Kingdom." Its principal rivals are Deliveroo and Uber Eats. Prosus's decision to purchase it, however, has caused other food delivery stocks to rise throughout Europe due to rumors of more industry mergers.

The Times' Jessica Newman claims that while shares of Amsterdam-listed Prosus may have dropped 7% following the takeover, the notion that the Just Eat expansion could be used to establish a "European tech champion" is not mere rhetoric. These plans are believable because Prosus already operates a food business in 70 countries and owns significant shares in a number of European food delivery businesses. In addition to being the sole owner of iFood, the top food delivery service in Latin America, Prosus also owns a 28 percent stake in Delivery Hero, Just Eats' German competitor; a 25 percent stake in Swiggy, India; and a 4 percent stake in Meituan, a Chinese e-commerce site.

The CEO of Prosuss stated last month that he has "£20 billion worth of firepower to spend on deal," according to Aimee Donnellan on Breakingviews. This would be more than sufficient to either "lobby for a merger of Delivery Hero with Just Eat" or purchase the remaining Delivery Hero shares. Combining the two with iFoods could result in 470 million synergies annually, making this approach even more alluring. Even though a deal like this might "raise antitrust eyebrows," the EU "is looking more kindly" on local champions within the bloc, especially considering that Just Eat alone has a market share of over 40% in 11 European countries.

According to Lex in the Financial Times, Prosus's history indicates that it is in the food delivery business "for the long term" and is looking for methods to "grow revenue rather than just cut costs," regardless of whether it attempts to further consolidate the sector. Another possibility is that it will be able to use some of iFoods' "magic sauce" on Just Eat. Voice-activated ordering for consumers, better routes for couriers, and more robust merchant profiling are a few examples of such "tech tweaks." Furthermore, "improving fraud detection and knowing when and how to dish out discounts to customers are also applicable across the portfolio."