Just Eat Takeaway: A Cautionary Tale in Acquisitions

During the height of the COVID-19 pandemic, numerous companies, including Just Eat Takeaway.com NV, engaged in aggressive acquisition strategies. These companies, driven by fervent competition and low interest rates, often paid premiums detached from fundamental values to acquire assets in high-demand sectors. Recently, however, this strategy has shown its drawbacks, as highlighted by Just Eat Takeaway's decision to sell Grubhub for $650 million—a significant discount from its original purchase price. Oliver Scharping, a portfolio manager at Berenberg, notes that this recent wave of asset divestiture signifies a market correction, where corporations are choosing strategic clarity over the inertia of sunk-cost fallacies. Companies are now prioritizing trimming unproductive assets despite financial losses, illustrating a transition towards more prudent financial decision-making.