DoorDash (DASH) will acquire Deliveroo in a £2.9 billion ($3.85 billion) deal, offering 180 pence per share to expand its European footprint and consolidate a crowded food-delivery market. The proposal, unanimously recommended by Deliveroo’s Independent Committee, values the British rival well below its 2021 IPO price, reflecting post-pandemic market realignments.
Concurrently, DoorDash will purchase hospitality-software provider SevenRooms for $1.2 billion, broadening its services beyond meal delivery. CEO Tony Xu emphasized that the combined scale and local expertise will drive product innovation and competitive differentiation against Just Eat and Uber Eats.
Market Overview:- DoorDash to buy Deliveroo for £2.9 billion, targeting UK and Ireland growth.
- Offer of 180 pence per share well under Deliveroo’s 390 pence IPO level.
- SevenRooms acquisition for $1.2 billion extends DoorDash into hospitality software.
- Deal backed by investors holding 15.4% of Deliveroo, excluding Amazon’s 14.4% stake.
- DoorDash forecasts Q2 EBITDA of $600–650 million, slightly below consensus.
- Uber invests $700 million in Trendyol’s food-delivery arm, intensifying competition.
- Deliveroo shareholders must approve with at least 75% support for the merger.
- Potential counterbids loom, notably from Amazon given its significant stake.
- Regulators likely to clear the deal, as DoorDash holds minimal market overlap.
- DoorDash’s acquisition of Deliveroo for £2.9 billion expands its European and Middle Eastern footprint, giving it access to over 40 countries and millions of new customers, and positioning it as a leading global player in food delivery.
- The combined scale and local expertise will enable DoorDash to invest in technology, logistics, and product innovation, strengthening its competitive differentiation against Just Eat, Uber Eats, and other rivals.
- Deliveroo’s established markets in the UK, Ireland, France, and the UAE, alongside DoorDash’s U.S. leadership, create a powerful cross-border network with significant growth potential.
- The SevenRooms acquisition broadens DoorDash’s offering beyond food delivery, equipping merchants with advanced CRM and guest experience tools to drive in-store and delivery sales, deepen customer relationships, and increase profitability.
- The deal is unanimously recommended by Deliveroo’s Independent Committee and is not expected to face major regulatory hurdles due to minimal market overlap, speeding up integration and execution.
- DoorDash’s willingness to pursue bold M&A, even as the sector consolidates post-pandemic, demonstrates strategic vision and a commitment to long-term market leadership.
- The 180 pence per share offer values Deliveroo well below its 2021 IPO price, reflecting sector headwinds and raising questions about the long-term profitability of food delivery platforms.
- Integration risks are high, with up to 830 potential job cuts and the challenge of harmonizing DoorDash’s practices with Deliveroo’s flexible gig worker model across diverse regulatory environments.
- Deliveroo’s shareholders must approve the merger with at least 75% support, and Amazon’s significant stake could enable a counterbid or complicate the approval process.
- DoorDash’s Q2 EBITDA guidance of $600–650 million is slightly below consensus, and the acquisition could weigh on margins and near-term profitability as the company absorbs integration costs and invests in new markets.
- Intensifying competition from Uber Eats, Just Eat, and Amazon-backed ventures may erode market share and limit the combined entity’s pricing power and growth prospects.
- Regulatory scrutiny, especially from the UK’s Competition and Markets Authority, could delay or impose conditions on the deal, particularly around gig worker rights and competition in grocery delivery.
Deliveroo shares rose modestly on the deal announcement, while DoorDash stock dipped on tempered Q2 profit guidance. Market watchers note that success hinges on seamless integration and cross-border execution.
With rivals like Uber (UBER) deepening regional partnerships and Amazon eyeing a counteroffer, DoorDash’s bold M&A push underscores the high-stakes battle for global delivery dominance.
