Just Eat Takeaway Sold for €4.1 Billion as Food Delivery Becomes a Cutthroat, Low-Margin War
Just Eat Takeaway Sold for €4.1 Billion as Food Delivery Becomes a Cutthroat, Low-Margin War
Prosus Takes Over Just Eat Takeaway in a High-Stakes Food Delivery Battle
Just Eat Takeaway, one of Europe’s largest food delivery platforms, is set to be acquired by investment group Prosus in a €4.1 billion all-cash deal, marking a pivotal shift in the online food delivery market. The offer of €20.30 per share represents a 22% premium over the stock’s recent high, yet it remains below the company’s 2016 IPO price of €23.50.
The deal is expected to finalize by the end of 2025, pending shareholder approval, and will result in Just Eat Takeaway being delisted from public markets. For Prosus, this move is the most significant under CEO Fabricio Bloisi, who aims to strengthen the company’s hold on the European market and position it as a "tech champion" in the sector.
The Pandemic Boom That Turned Into a Nightmare
1. Food Delivery’s Golden Age Didn’t Last Long
The pandemic catapulted food delivery services into unprecedented demand. Just Eat Takeaway, like its competitors, benefited from soaring orders, which drove its stock price to record highs. However, as lockdowns lifted and consumer behavior normalized, the industry faced a sharp correction. The sudden decline in growth left many companies overbuilt and struggling to maintain profitability.
2. Grubhub Acquisition: A Billion-Dollar Blunder
Just Eat Takeaway’s decision to acquire US-based Grubhub for $7.3 billion in 2021 turned out to be a costly mistake. As demand cooled, Grubhub's performance deteriorated, forcing Just Eat Takeaway to sell the business in November 2023 for a mere $650 million—a massive write-down that contributed to a €1.16 billion impairment in 2024. The failed expansion left a dent in investor confidence and significantly reduced the company's valuation.
3. Brutal Competition and Bleeding Margins
The food delivery business operates on thin margins, with high operational costs tied to logistics, marketing, and driver wages. Just Eat Takeaway attempted to cut expenses by delisting from the London Stock Exchange in late 2023, refocusing on European markets. However, intensifying competition from Uber Eats, DoorDash, and Deliveroo, combined with regulatory scrutiny over worker classification and fee caps, continues to pressure profitability.
4. From Stock Market Darling to a Tough Sell
Despite Prosus offering a premium over the recent stock price, Just Eat Takeaway’s valuation remains a fraction of its 2020 peak. This reflects broader investor skepticism about the sector’s long-term growth potential. Once seen as high-growth disruptors, food delivery platforms are now being judged on their ability to achieve sustainable profitability rather than endless expansion.
The Harsh Reality: Food Delivery is No Longer a Cash Cow
The Industry-Wide Domino Effect
Just Eat Takeaway’s struggles are not unique. The food delivery sector as a whole is facing a convergence of challenges:
- Post-pandemic demand correction: Companies that scaled aggressively during COVID-19 are now struggling to maintain order volumes.
- Regulatory hurdles: Many jurisdictions are imposing stricter labor laws, increasing costs for platforms reliant on gig workers.
- Market saturation and price wars: Intense competition forces companies to lower fees, further squeezing margins.
- Operational inefficiencies: The cost of acquiring customers and maintaining delivery fleets remains high, limiting profitability.
Even industry leaders like DoorDash and Uber Eats have encountered these headwinds, with some reporting profitable quarters but facing ongoing uncertainties.
The Future of Food Delivery: A High-Stakes Survival Game
1. Only the Biggest Players Will Survive
Only platforms with significant scale will survive. Smaller players will struggle to compete, leading to further consolidation. Companies that dominate their regional markets—either through acquisitions or aggressive cost-cutting—will have an edge.
2. AI and Automation: The Last Hope for Profitability?
To improve margins, food delivery platforms are investing heavily in AI-driven logistics and automation. Prosus, for instance, plans to integrate advanced technology into Just Eat Takeaway’s operations, similar to its approach with iFood in Brazil. However, AI and robotics are not immediate solutions—they require significant investment and regulatory approval before they can meaningfully impact costs.
3. Food Delivery Platforms Must Evolve or Die
The most successful platforms will evolve beyond pure food delivery. Companies that integrate grocery delivery, fintech solutions, and customer loyalty programs will have an advantage in maintaining engagement and increasing order frequency.
The Takeaway from Just Eat’s Tumultuous Ride
Just Eat Takeaway’s acquisition by Prosus highlights a fundamental shift in the food delivery industry—from aggressive expansion to survival mode. The sector is no longer about rapid growth but rather about operational efficiency and strategic positioning. Investors should be wary: while food delivery remains a valuable service, its business model is proving to be a long-term battle of scale, cost-cutting, and technology-driven optimization rather than a lucrative, high-margin play.
As the industry matures, only the largest and most innovative players will withstand the pressures of regulatory hurdles, competitive pricing, and shifting consumer habits. The takeaway? Food delivery is no longer a disruptor—it’s just another commodity business fighting for survival.