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Just Eat gets cash injection from Brazil sale

by LLB Reporter
19th Aug 22 11:23 am

In what seems like a never-ending battle between online takeaway firms, Just Eat Takeaway has secured itself some more firepower through the sale of a stake in Brazil’s iFood.

A €1.8 billion cash injection could be very helpful in terms of paying down debt and potentially marks a shift in Just Eat’s approach.

“Though the value of the transaction is notably less than the €2.3 billion turned down by the company last summer when ordering food over the internet arguably reached its zenith thanks to the pandemic,” says AJ Bell financial analyst Danni Hewson.

“Just Eat might have to swallow the sale of its US platform Grubhub at a similarly discounted price, not long after splashing out on a $7.3 billion deal, as it looks to concentrate on boosting its market position in Europe.

“This retrenchment to a European focus makes sense when you consider how fierce the competition is on this side of the Atlantic.

“However, there are long-term and short-term questions about the viability of the business. Increased costs mean the company will probably have to put up prices for delivery. But will people be prepared to pay more, particularly when cost of living pressures are becoming more acute?

“All the while the company is facing rising costs and will have to maintain promotional spend to protect and grow its market share.”

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