In a significant move to expand its international presence, U.S.-based food delivery giant DoorDash has agreed to acquire its British rival, Deliveroo, for £2.9 billion ($3.9 billion). The deal, announced on Tuesday, comes as DoorDash aims to bolster its foothold in Europe, competing against the likes of Just Eat and Uber Eats.
The acquisition offer, which values Deliveroo at 180 pence per share, represents a 44% premium over the company’s closing share price on April 4. Deliveroo’s shares saw a surge last week, reaching a three-year high after the announcement of the takeover bid, signaling strong investor interest.
Deliveroo, which has faced challenges since its initial public offering (IPO) in 2021, saw its stock price fall sharply following a rocky market debut. Despite its initial promise as a British tech darling, the company struggled in the post-pandemic environment, with a significant decline in its share price since the IPO. However, the latest deal with DoorDash is seen as a new chapter in the company’s trajectory, offering it a chance for greater stability and growth.
Tony Xu, CEO and Co-founder of DoorDash, expressed excitement about the merger, stating, “I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together.” He highlighted the potential to cover more than 40 countries, reaching over 1 billion people, and offering local businesses enhanced tools and technology to thrive.
The acquisition also marks an effort by DoorDash to accelerate its international expansion. The company had previously acquired Finnish food delivery app Wolt in 2022 for €7 billion ($7.9 billion). By bringing Deliveroo under its umbrella, DoorDash aims to increase its market share in key European markets, including the U.K., France, and Italy, which have been major contributors to Deliveroo’s revenue.
The deal also signals the ongoing consolidation in the food delivery sector. Earlier this year, Deliveroo sold parts of its Hong Kong unit to Delivery Hero, and Just Eat announced its acquisition by the investment group Prosus. This wave of consolidation is expected to continue as companies seek to strengthen their positions amid fierce competition and shifting market dynamics.
While the acquisition offer has been accepted by Deliveroo’s board, DoorDash has made it clear that the financial terms are final unless a third-party bidder emerges with a more attractive offer. Deliveroo has already secured backing from major investors holding around 15.4% of shares, including from founder Will Shu, who is set to receive £172.4 million ($229.7 million) for his 6.4% stake in the company.
However, analysts have pointed out the absence of Amazon, which holds a 14.4% stake in Deliveroo, from the list of investors supporting the deal. Some experts believe Amazon could still emerge as a potential counter-bidder, although the company has not made any public statements regarding the acquisition.
With the merger expected to strengthen DoorDash’s position in the competitive European food delivery market, the deal marks a major shift in the landscape of global food delivery services. The full terms of the acquisition are set to unfold in the coming months, as both companies work to integrate their operations and expand their market reach.
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Disclaimer: This article is for informational purposes only. All financial terms, figures, and statements provided are based on the latest available data and subject to change. Please verify details with official sources before making any decisions.
