DoorDash agrees to buy Deliveroo in €3.4bn deal

In 2024, Deliveroo and DoorDash had orders worth about a combined €80bn, the companies said, with roughly 7m and 42m monthly active users, respectively.

US food delivery firm DoorDash will buy Deliveroo in a deal valuing the British rival at about £2.9bn (€3.4bn), the companies said, banking on a bigger reach and local expertise to take on competition.

The groups rekindled talks last month after DoorDash approached Deliveroo with a 180 pence per share proposal, which was confirmed on Tuesday as the final offer, sending Deliveroo shares up about 2%.

Still, at Tuesday's high of 176.4 pence, the stock was trading under the offer price. Deliveroo's shares have struggled since their debut when they were sold at 390 pence in 2021, a time when meal delivery services were boosted by the pandemic.

The acquisition will help DoorDash grow its market share in Europe, competing against Just Eat and Uber Eats, as it adds Deliveroo's largest market, Britain and Ireland to its roster, along with others. 

In 2024, Deliveroo and DoorDash had orders worth about a combined €80bn, the companies said, with roughly 7m and 42m monthly active users, respectively.

"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," its Chair Claudia Arney said in a statement.

Jefferies analysts said the recommended final offer, came "well ahead" of a May 23 deadline for DoorDash to make good on its initial proposal, "suggesting that the engagement to date had been more substantive than originally signalled".

Deliveroo said it has received undertakings of support from investors holding about 15.4% of shares, including from co-founder and chief executive Will Shu, and investment firms Greenoaks and DST Global.

For the deal to go through, Deliveroo will need approval of at least 75% of shareholders. Panmure Liberum analysts highlighted "the notable absence" of Deliveroo's largest shareholder, Amazon, from this list, adding that they still see Amazon as the most likely counter-bidder. Amazon, which has a 14.38% stake in Deliveroo, did not immediately respond to a Reuters request for comment.

Shu, who co-founded Deliveroo in 2013 with his childhood friend Greg Orlowski, would receive about 172.4 million pounds for his 6.4% stake, the third largest.

Reuters