US food delivery giant DoorDash is to acquire Deliveroo for £2.9bn, after the boards of both companies reached agreement on the deal.
DoorDash is offering 180p per Deliveroo share, a 44% increase on the aggregator app’s share price before takeover talks were made public last month. However, the price is far below the 390p per share that Deliveroo floated on the London Stock Exchange in 2021.
Global growth
Once the deal is done, DoorDash will have a presence in more than 40 countries, serving approximately 50 million monthly active users. Last year, the two companies together generated a total gross order value of approximately $90bn.
“When Greg and I founded this business in 2013, we made it our mission to bring the best of our consumers’ neighbourhoods to their door,” said Will Shu, CEO and co-founder of Deliveroo, in a statement this morning. “We’ve stayed relentlessly focused on this mission for the past 12 years, keeping our consumers at the heart of everything we do and aiming to deliver them flawless experiences, new innovations and real value. I’m very proud of everything we have achieved as a standalone business.
“We are now at the beginning of a transformative new chapter. DoorDash and Deliveroo are like-minded organisations with a shared strategic vision and aligned values. Together, we will be even better positioned to serve consumers, merchants, riders and local communities.
“The enlarged group will have the scale to invest in product, technology and the overall consumer value proposition,” added Shu, who is set to receive about £172.4m for his 6.4% stake.
Deliveroo currently operates in nine countries, all of which are new for DoorDash. The takeover will be put to shareholders for final approval. The deal is expected to complete during the fourth quarter of this year.
Local economies
“Our mission at DoorDash is to grow and empower local economies. We started the company in 2013 to help people like my mom – people running local businesses and creating the vast majority of jobs and economic activity in our communities,” said Tony Xu, CEO and co-founder of DoorDash.
“Our focus ever since has been on building the best products and services to enable these merchants to grow, connecting them with consumers in their neighbourhoods, and creating a local commerce platform that offers uniquely flexible earnings opportunities.
“Coming together with teams that have similar visions and values accelerates our work to achieve that mission. Deliveroo is just such a team and one that I have long admired,” he added.
In its full-year results in March, Deliveroo revealed it achieved its first-ever annual profit last year and was expecting more growth despite an uncertain consumer environment.
The listed company recorded a profit of £2.9m, compared with a loss of £31.8m the previous year. Its gross transaction value (GTV) was up 6% to £7.4bn, and up 7% in the UK. Deliveroo also said it had enjoyed a return to order growth of 2%.
Non-takeaway food has been a major driver of that growth. Grocery now accounts for 16% of the company’s global GTV. Deliveroo has also doubled the number of non-food retail sites trading on the platform.
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