DoorDash to Acquire Deliveroo in USD 3.85 Billion Deal to Expand European Reach
- tech360.tv
- 21 hours ago
- 2 min read
DoorDash will acquire British food delivery company Deliveroo in a deal valued at approximately USD 3.85 billion, the companies announced Tuesday.
The agreement values Deliveroo at about GBP 2.9 billion and marks a major consolidation move in the food delivery sector, which has faced pressure from inflation and cautious consumer spending.
DoorDash also announced a separate acquisition of New York-based hospitality software firm SevenRooms for about USD 1.2 billion.
The Deliveroo deal follows renewed talks last month, when DoorDash proposed an offer of 180 pence per share. Deliveroo shares rose about 2% following the confirmation, though they remained below the offer price at 176.40 pence.
Deliveroo shares have struggled since their 2021 IPO, when they were priced at 390 pence during a pandemic-driven boom in food delivery.
Deliveroo CEO Will Shu said comparing the IPO price to the current deal was not fair, citing different market conditions and interest rates.
Shu, who co-founded Deliveroo in 2013, said the company had a strong future but faced larger global competitors. He said the board concluded that joining DoorDash was the best path forward.
AJ Bell Investment Director Russ Mould said the deal reflects a broader trend of consolidation in the sector, where only the strongest players are expected to survive.
The acquisition will give DoorDash a stronger foothold in Europe, particularly in Britain and Ireland, where Deliveroo has its largest markets.
DoorDash CEO Tony Xu said the deal would allow the company to scale its European investments and introduce new products.
In 2024, DoorDash and Deliveroo had a combined order value of about USD 90 billion, with 42 million and 7 million monthly active users, respectively.
Despite the acquisition news, DoorDash shares fell about 7% after the company issued a wide forecast for second-quarter adjusted earnings, estimated between USD 600 million and USD 650 million.
DoorDash said demand remains strong but noted the potential for shifts in consumer behaviour.
Meanwhile, Uber announced it would acquire an 85% stake in Turkish e-commerce firm Trendyol’s food delivery business for about USD 700 million.
DoorDash said it would not raise its offer for Deliveroo unless a competing bid emerges.
Deliveroo has received support from investors holding 15.4% of shares, including Shu and investment firms Greenoaks and DST Global.
The deal requires approval from at least 75% of Deliveroo shareholders.
Analysts noted the absence of Deliveroo’s largest shareholder, Amazon, which holds a 14.38% stake. Amazon declined to comment.
Shu, who will receive GBP 172.4 million for his 6.4% stake, did not comment on shareholder discussions or his future plans.
The deal is not expected to face regulatory challenges, as DoorDash currently has little presence in Deliveroo’s 10 markets.
DoorDash to acquire Deliveroo for USD 3.85 billion
Deal values Deliveroo at 180 pence per share
Acquisition expands DoorDash’s presence in Europe
Source: REUTERS
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