DoorDash’s Bold Leap: Acquiring Deliveroo for $3.29 Billion
On Tuesday, DoorDash, the prominent U.S. food delivery giant, announced its intention to acquire its UK counterpart, Deliveroo, for approximately £2.9 billion (around $3.29 billion). This strategic move is part of DoorDash’s ongoing pursuit to broaden its reach across new markets.
Under the terms of the deal, Deliveroo shareholders will receive 180 pence per share—an enticing 44% premium based on the stock’s value as of April 4, the day DoorDash first approached the company regarding the acquisition.
This alliance will enable DoorDash to tap into Deliveroo’s established presence across nine European markets, positioning the combined entity to better contend with noteworthy competitors like Just Eat Takeaway and Uber Eats. Following the completion of the acquisition, DoorDash anticipates operating in a total of 40 countries and catering to around 50 million active users each month.
Founded in 2013, Deliveroo went public in 2021 amidst a flourishing food and grocery delivery landscape stimulated by the pandemic. As many consumers adjusted to new lifestyles involving remote work and increased takeout ordering, the sector saw a influx of startups and venture capital investments.
However, as COVID-19 fears subsided and patrons returned to brick-and-mortar dining, many delivery startups, including Deliveroo, have grappled with the shifting consumer habits in an increasingly competitive environment. Contributing to their challenges, a tightening capital market in 2022 saw interest rates rise, causing many investors to become more discerning about their investments.
Since its public listing, Deliveroo’s shares had plummeted over 50% until the recent acquisition offer. In March, the company opted to divest its Hong Kong operations to Delivery Hero, attributing this choice to fierce market competition. Additionally, it exited the Australian market last year due to similar challenges.
In the last reported fiscal year ending December 2024, Deliveroo posted revenues of around £2 billion, with a gross transaction value of £7.1 billion. With this acquisition, DoorDash is poised to redefine its market presence while navigating the evolving landscape of food delivery services.
