DoorDash to Acquire Deliveroo for $3.9 Billion in Major International Expansion
Key Points
- British food delivery company Deliveroo has announced that its board has agreed to a takeover proposal from U.S.-based DoorDash, offering 180 pence per share.
- The offer represents a 44% premium over Deliveroo’s closing share price on April 4, the last trading day before DoorDash submitted its initial proposal.
- The deal values Deliveroo at approximately £2.9 billion ($3.9 billion) on a fully diluted basis.
LONDON — Deliveroo, the UK-based food and grocery delivery service, confirmed Monday it has accepted a buyout proposal from U.S. food delivery giant DoorDash. The transaction, valued at £2.9 billion ($3.9 billion), offers Deliveroo shareholders 180 pence per share.
This price point reflects a 44% premium over Deliveroo’s April 4 closing price, the final trading day before the first formal approach from DoorDash. Following the news, Deliveroo’s stock surged to a three-year high amid speculation around the deal.
According to DoorDash, the terms of the agreement are final and will only be revised in the event of a competing bid from another party.
Tony Xu, CEO and Co-founder of DoorDash, expressed optimism about the merger, stating:
“I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together. We’ll cover more than 40 countries with a combined population of more than 1 billion people, enabling us to provide more local businesses with the tools and technology they need to thrive.” (F.M.I.E Sources)
A Turning Point for Deliveroo
This acquisition concludes Deliveroo’s turbulent journey as a public company. Launched on the London Stock Exchange in 2021 at an IPO price of £3.90 per share, Deliveroo quickly lost momentum—falling 30% on its first day of trading and more than 50% since.
Initially hailed as a standout in the UK tech scene, the company’s valuation declined amid concerns over the sustainability of post-pandemic demand, aggressive competition, and scrutiny over its gig economy model.
DoorDash’s Global Strategy
The Deliveroo acquisition underlines DoorDash’s continued strategy of global growth. This follows its 2022 acquisition of Finnish delivery platform Wolt for €7 billion ($7.9 billion).
The food delivery space has seen significant consolidation in recent years. Deliveroo itself recently sold segments of its Hong Kong operation to Delivery Hero, and rival Just Eat has agreed to be acquired by investment group Prosus.
(All reporting based on F.M.I.E Sources)