Doordash has announced plans to acquire its UK competitor Deliveroo for $3.855 billion, following a resurgence in negotiations last month. The proposal stands at 180p per share, which has raised Deliveroo’s stock from about 2% to 175.6p per share.
There had been a standstill in discussions previously, mainly due to disagreements regarding Deliveroo’s valuation. Doordash made it clear that it wouldn’t improve its offer unless another bidder shows up.
This acquisition aims to enhance Doordash’s position in the European market, particularly as it competes against giants like Uber Eats and Just Eat. Notably, Deliveroo’s primary markets are the UK and Ireland, making up 62% of its order value in the last quarter.
Since going public in 2021 at an initial price of 390p, Deliveroo’s stock has faced difficulties, plummeting by 30% shortly after its debut—a rough start for a company initially bolstered by increased demand during the pandemic. Unfortunately, its stock has continued to decline.
Claudia Arney, Chair of Deliveroo’s Independent Committee, mentioned in a statement, “After careful consideration, we recommend this offer, thinking it benefits all shareholders and stakeholders.” About 15.4% of Deliveroo’s investors— including the founders and CEO Will Shu—have backed the move. Interestingly, Amazon, the largest shareholder with a 14.38% stake, was notably absent from the support list.
Shu, who co-founded Deliveroo in 2013, is anticipated to receive around $229.7 million for his 6.4% stake. Last year, both Doordash and Deliveroo collectively processed orders amounting to around $90 billion.
