Prosus Begins Paring $4 Billion Stake In Meituan After The Chinese Company Expands Into Brazil: Report

Prosus NV (PROSY) has reportedly started offloading its $4 billion stake in China-based Meituan after the latter announced plans to expand into some markets where Prosus has a presence.

According to a Bloomberg report citing people familiar with the matter, Prosus has sold nearly $250 million worth of shares of Meituan over the last two weeks and could sell more.

Prosus held 257.5 million shares in Meituan as of Tuesday, according to the report, valuing its holdings at $4.2 billion. This translates to a stake of less than 5% in the Chinese food delivery company.

Prosus’ head of investments, Fahd Beg, said the company’s priority is to build its ecosystems.

“We are happy to keep some minority stakes and to sell down in some instances to help fund our ecosystems,” Beg said, according to the report.

Earlier in May, Meituan announced the beginning of its global push with a $1 billion investment pledge in Brazil, according to a Bloomberg report. The Chinese food delivery company said it would bring its Keeta brand to the South American country, following launches in Hong Kong and Saudi Arabia.

Prosus already has a presence in Brazil, where its iFood brand dominates the market. On Tuesday, iFood acquired a 20% stake in technology company CRMBonus, according to a Reuters report. CRMBonus specializes in customer acquisition, engagement, and retention solutions.

The two companies also have an existing relationship wherein iFood Club members are offered special vouchers through CRMBonus’ services.

The Prosus-owned iFood also teamed up with Uber Technologies Inc. (UBER) in May, allowing users of either of the companies to use the services on both apps in Brazil.

Prosus’ American Depository Receipts (ADR) have surged nearly 49% year-to-date. At the time of writing, the ADR was flat, and retail sentiment on Stocktwits was in the ‘bearish’ territory.

Meituan’s ADRs fell 0.2% in Wednesday’s pre-market trading, and they are down nearly 17% year-to-date. Stocktwits data showed the retail sentiment around Meituan ADR was in the ‘bearish’ territory.

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