Prosus, a global technology investor and consumer Internet group, has reportedly started offloading its $4 billion stake in Chinese food delivery giant Meituan, starting with a $250 million divestment over the last two weeks.
According to a Bloomberg report on Wednesday, Prosus could sell more amidst Meituan’s announced plans to expand into some markets where Prosus has a presence, including Brazil.
Reports said Meituan is considering investing $1 billion to expand its food delivery brand, Keeta, into Brazil, where the market is dominated by iFood, a portfolio company of Prosus.
This move by Meituan directly poses a competitive threat to iFood.
Meituan is also entering the Middle East, where Prosus’ portfolio, the UAE-based food delivery platform Talabat, also operates.
Prosus holds a less than 5% stake in Meituan, or about 257.5 million shares as of July 29, per the report. This means Prosus’ holding is valued at about $4.2 billion.
Sources indicated that Prosus will use the proceeds from the sale to develop its other e-commerce brands.
Meituan reported net profit for the first quarter of 10.9 billion yuan ($1.52 billion), up 46.2% from 5.2 billion yuan in the same period a year ago.
The company, which operates an app providing services as varied as bike-sharing, ticket-booking, and maps, reported revenue in the three months to March 31 of 86.6 billion yuan ($12.1 billion), compared to 73.3 billion yuan in the same period a year earlier.
Prosus, on the other hand, reported a 47% jump in full-year core earnings to $7.4 billion, exceeding its financial targets, driven by its expansion into food delivery and e-commerce.
It earlier offered to slash its Delivery Hero stake to below 10% and give up its board seat to address EU concerns over its 4.1 billion euro ($4.78 billion) Just Eat Takeaway deal, two people with direct knowledge of the matter said on Friday.
