DoorDash, the largest food delivery service in the United States, has agreed to acquire British rival Deliveroo in a $3.9 billion all-cash deal, marking a major step in its international expansion strategy.
The San Francisco-based company will pay 180 pence per share for Deliveroo, representing a 44% premium over the UK firm’s stock price before the deal talks became public. Deliveroo’s board has unanimously recommended the offer, and the deal is expected to close later this year, pending shareholder approval.
Founded in 2013, Deliveroo operates in nine countries, including the United Kingdom, France, and the United Arab Emirates. Despite rapid early growth, the company has struggled with profitability and intense competition, particularly after its disappointing 2021 IPO, where shares debuted at 390 pence and have since lost more than half their value.
DoorDash, which also acquired Finland-based delivery app Wolt in 2022 for $7.9 billion, is pursuing an aggressive strategy to build a global food delivery platform. With Deliveroo, DoorDash will significantly increase its footprint across Europe and the Middle East, operating in over 40 countries and serving more than a billion people worldwide.
DoorDash CEO Tony Xu called the acquisition a “transformative opportunity” and said the combined company aims to “deliver the best experience for all stakeholders” and expand the “GDP of local communities.”
Deliveroo CEO and co-founder Will Shu, who owns a 6.4% stake in the company, stands to receive approximately $215 million from the deal. Shu described the merger as the beginning of “a transformative new chapter,” saying it would better position the companies to serve customers, merchants, and riders.
Regulators are not expected to raise significant antitrust objections due to the companies’ limited market overlap. However, Deliveroo’s major shareholders, including Amazon, which holds a 14.4% stake, have yet to publicly endorse the acquisition.
The deal signals continued consolidation in the food delivery sector as players pursue scale and profitability in a highly competitive global market.