LONDON (AP) - DoorDash, the prominent U.S. food delivery application, has announced its agreement to acquire British competitor Deliveroo in a transaction valued at 2.9 billion pounds ($3.9 billion) in cash. This strategic move aims to strengthen DoorDash's presence across Europe, Asia, and the Middle East.
According to a joint statement from both companies released prior to the opening of the London Stock Exchange on Tuesday, DoorDash will pay 180 pence ($2.40) for each share of Deliveroo. This price represents a 29% premium over Deliveroo's closing share price of April 24, the day prior to the public announcement of the acquisition offer.
This acquisition marks DoorDash's second significant international purchase within the last three years as the company moves beyond its established markets in the United States, Canada, and Australia. Following the acquisition of Deliveroo and the previous purchase of Helsinki-based Wolt Enterprises in 2022, DoorDash is set to expand its operational footprint to over 40 markets globally.
DoorDash CEO Tony Xu expressed his enthusiasm regarding the new partnership, stating, "I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together." This acquisition underscores the ongoing consolidation in the food delivery industry as companies seek to enhance their competitive edge and broaden their service coverage.
Both DoorDash and Deliveroo were founded in 2013, harnessing the emerging smartphone technology of the time to connect restaurants with customers via a network of delivery riders. Deliveroo currently operates in nine countries, including the United Kingdom, Ireland, France, Italy, Belgium, Singapore, the United Arab Emirates, Kuwait, and Qatar. In 2023, the U.K. and Ireland accounted for 59% of Deliveroo's total business revenue, demonstrating the company's significant presence in these key markets.
The announcement of this acquisition follows closely on the heels of Prosus, a technology investment firm, agreeing to purchase Amsterdam-based Just Eat Takeaway.com for 4.1 billion euros ($4.29 billion). This move aims to enhance Prosus's portfolio within the competitive food delivery landscape in Europe, illustrating the ongoing trend of consolidation in this sector.
The DoorDash-Deliveroo deal signals an important shift in the competitive dynamics of the food delivery market, as U.S. companies continue to seek international growth opportunities. By acquiring Deliveroo, DoorDash aims to leverage its logistics and technological capabilities to compete more effectively against other market players in Europe and beyond.
The implications of this acquisition could be far-reaching, potentially reshaping the landscape of food delivery services and impacting consumers, restaurants, and delivery riders alike. As DoorDash continues its aggressive expansion strategy, it will be crucial to monitor how this acquisition influences market trends and consumer behaviors in the evolving food delivery industry.
