American delivery service company DoorDash announced its agreement to acquire its British counterpart Deliveroo in a deal valued at £2.9 billion ($3.9 billion), according to a joint statement released today, Tuesday.
DoorDash clarified that it will pay £1.80 per share for Deliveroo shares, which has exited several markets in recent years due to intensified competition.
Tony Xu, CEO of DoorDash, said in a statement, "The unified entity will combine DoorDash's operational strength and Deliveroo's local expertise to invest in innovation and execution at a higher level."
This deal will give the unified food delivery service a presence in more than 40 countries, serving around 50 million active users monthly.
Deliveroo, listed on the London Stock Exchange, reported its first annual profit last March after incurring significant losses throughout the entire year due to rising investment costs since its founding by American Will Shu in 2013.
The company saw a surge in demand during the COVID-19 pandemic from customers who were forced to stay home due to lockdowns, but increased competition has since led it to scale back its global operations.
Recently, Deliveroo pulled out of Hong Kong amid rising competition in the Chinese city after exiting Australia and the Netherlands.
The deal is expected to close in the last three months of 2025, pending regulatory approval and the agreement of Deliveroo shareholders.
DoorDash’s stock price (NASDAQ: DASH) closed higher in yesterday's trading, up by 0.15%, and the news of the acquisition is expected to have a positive impact on the stock.
Meanwhile, Deliveroo's share price (ROO.L) rose by nearly 2% in today’s trading following the announcement of the deal.
This deal is the latest merger and acquisition in the food delivery market, following Dutch investment group Prosus announcing plans in February to acquire Just Eat Takeaway.com for €4.1 billion.
