In a significant move within the food delivery sector, British company Deliveroo has agreed to a takeover by American rival DoorDash, valuing the London-based firm at approximately £2.9 billion ($3.9 billion). This acquisition marks a pivotal moment for Deliveroo, which has been navigating a tumultuous public journey since its IPO in 2021.
Under the terms of the deal, DoorDash will acquire all issued and to be issued shares of Deliveroo at a price of 180 pence per share, reflecting a substantial 44% premium over Deliveroo's closing price of 125 pence on April 4, 2025, the last business day before the offer was made public. However, this offer is significantly lower than Deliveroo's initial public offering (IPO) price of 390 pence per share, which the company achieved when it launched on the London Stock Exchange in April 2021.
Will Shu, co-founder and CEO of Deliveroo, expressed pride in the company’s achievements as an independent entity, stating, "We are now at the beginning of a transformative new chapter. DoorDash and Deliveroo are like-minded organizations with a shared strategic vision and aligned values." He highlighted that the enlarged group would have the scale to invest in product development, technology, and enhance the overall consumer value proposition.
The acquisition, which is expected to close in the fourth quarter of 2025, will create a combined entity that operates in over 40 countries and serves approximately 50 million customers monthly. This strategic move aims to enhance DoorDash's position as a leading global platform in local commerce, enabling it to better serve businesses, consumers, and couriers.
DoorDash, founded in 2013, has established itself as the largest food delivery service in the United States, with over 42 million active users and partnerships with more than 500,000 local businesses. The company has been on a growth trajectory, having acquired Finnish food delivery service Wolt for €7 billion ($7.9 billion) in 2022. The acquisition of Deliveroo is seen as part of DoorDash's strategy to expand its international footprint and strengthen its competitive edge against other players in the market, such as Just Eat and Uber Eats.
Claudia Arney, Chair of Deliveroo, emphasized the significance of the deal for all stakeholders involved. She stated, "Deliveroo changed the face of food delivery in the UK and around the world. This offer will enable Deliveroo to build on its significant strategic and operational progress, strengthen its competitive advantage, and invest further in innovation."
Deliveroo has faced challenges since its public listing, including a 30% drop in share price shortly after its IPO, leading to its nickname "flopperoo". The company has seen its shares decline more than 50% from the IPO price, prompting concerns about its long-term sustainability in a post-COVID-19 market, where demand for delivery services has fluctuated.
Despite these challenges, Deliveroo achieved its first annual pre-tax profit in 2024, reporting £12 million in profit and £2.1 billion in revenue. The company serves around 7 million monthly active consumers and works with approximately 176,000 restaurants, grocers, and retail partners across nine countries, including Belgium, France, Italy, and the United Kingdom.
The takeover could also have implications for employment, as it may lead to job losses equivalent to 1% to 3% of the combined workforce of approximately 27,700 employees. DoorDash has indicated that it aims to minimize redundancies by not replacing staff who leave and by pausing or slowing hiring in certain areas.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, commented on the competitive landscape that the acquisition could create, noting that it could transform the UK market into a "fierce two-horse race" between DoorDash and Uber. He remarked, "With no competing bid in sight, this looks like a bold, calculated move to outpace global rivals and gain ground fast."
As the food delivery sector continues to consolidate, the acquisition of Deliveroo by DoorDash exemplifies the ongoing shifts in the industry. The deal is expected to enhance the combined entity's ability to innovate and improve services for consumers and merchants alike, while also providing new opportunities for couriers.
In summary, the acquisition of Deliveroo by DoorDash represents a significant development in the food delivery industry, promising to reshape the competitive landscape and bolster both companies' positions in the global market. With a shared vision and commitment to local commerce, the newly formed entity aims to deliver enhanced value to all stakeholders involved.
