DoorDash will acquire British food delivery company Deliveroo in a $3.9 billion deal, marking one of the largest cross-border moves in the food delivery sector to date and underscoring the U.S. firm's continued push to expand its international footprint.
The transaction, announced Tuesday, values Deliveroo at £2.9 billion and offers shareholders 180 pence per share-representing a 44% premium over the stock's closing price on April 4, the last trading day before DoorDash's initial approach. Deliveroo's board unanimously recommended the offer after weeks of resumed negotiations. Shares in Deliveroo rose nearly 2% to 175.6 pence following the announcement.
"Following careful consideration, the Deliveroo Independent Committee has unanimously decided to recommend this offer, considering it to be in the interests of all our shareholders and wider stakeholders," said Claudia Arney, Chair of Deliveroo.
DoorDash CEO Tony Xu said the acquisition would give the combined company access to more than 40 countries and over 1 billion people. "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," Xu stated.
Deliveroo's largest markets are the U.K. and Ireland, which together accounted for 62% of the company's total order value in its most recent quarter. DoorDash said the offer was final and would not be raised unless a competing bid emerged.
Deliveroo had a rocky journey as a publicly traded company. After its highly anticipated IPO in March 2021, shares plunged 30% on debut-one of the worst openings in the history of the London Stock Exchange. The firm never recovered its IPO price of 390 pence and is down more than 50% from that level, with continued investor concerns around the sustainability of post-pandemic demand and legal scrutiny of the gig economy model.
The Deliveroo takeover comes after DoorDash's 2022 acquisition of Finnish food delivery platform Wolt for $7.9 billion. The two companies together processed around $90 billion in orders last year, according to internal figures.
Deliveroo confirmed that it had received support for the deal from shareholders holding 15.4% of its stock, including founder and CEO Will Shu, Greenoaks Capital, and DST Global. Shu's 6.4% stake is expected to yield him approximately $229.7 million.
Amazon, Deliveroo's largest investor with a 14.38% stake, has not yet issued a statement or confirmed its position on the acquisition.
