Deliveroo to Be Acquired by DoorDash in £2.9 Billion Mega Deal

US delivery giant enters European market with major takeover, raising questions about the future of the Deliveroo brand

In a bold move to expand its global footprint, American delivery giant DoorDash has struck a deal to acquire UK-based Deliveroo for a staggering £2.9 billion. The takeover, which still requires shareholder approval, is expected to complete later this year.

What’s in the Deal?

DoorDash’s offer values Deliveroo shares at 180p each—a 44% premium on the stock price as of 4 April, the day before discussions began. The offer has been unanimously recommended by an independent board and, unless a rival bid appears, DoorDash has said this offer is final.

Deliveroo co-founder and CEO Will Shu stands to pocket over £170 million from the sale, which could mark the end of an era for one of the UK’s most recognisable tech startups.

A Strategic Leap into Europe

The acquisition marks DoorDash’s first significant push into the European market. The combined entity will operate in 40 countries and oversee annual order volumes worth approximately £10 billion.

Deliveroo currently operates in nine countries and processed around £2 billion in food orders last year. This move positions DoorDash to compete directly with other European delivery heavyweights such as Just Eat and Uber Eats.

Tony Xu, CEO and co-founder of DoorDash, highlighted the synergy between the two firms, stating:

“Together, we will build the leading global platform for local commerce and deliver an exceptional experience for all our stakeholders.”

What Happens to the Deliveroo Brand?

Despite the scale of the acquisition, it remains unclear whether the Deliveroo brand will survive. Market watchers are waiting to see if DoorDash will retain the name in the UK and other markets, or eventually rebrand to unify its global presence.

Will Shu commented on the change, saying:

“This is a transformative chapter. DoorDash and Deliveroo are aligned in vision and values. Together, we’re stronger and more capable of serving consumers, merchants, and riders.”

City of London Loses Another Tech Player

The acquisition is seen as a blow to London’s tech ambitions. Deliveroo had long been viewed as a standout player in the city’s digital economy, despite its stock market struggles since its high-profile IPO in 2021. Shares had fallen nearly 50% since its market debut, impacted by waning demand post-COVID.

While the deal isn’t expected to face regulatory obstacles—it gives DoorDash access to 10 new markets where it currently has no operations—it does highlight the ongoing trend of UK tech firms being snapped up by foreign giants.

Conclusion: A Game-Changing Shift for Food Delivery in Europe

This £2.9 billion acquisition is more than a simple buyout—it’s a pivotal moment for the European food delivery market. With DoorDash gaining a firm foothold in the UK and beyond, competition is set to intensify, and the future of the Deliveroo brand hangs in the balance. Shareholders and industry stakeholders alike will be watching closely as the next chapter in this delivery giant’s story unfolds.

Sources: (SKY.com, ChatGPT)