(Reuters) – U.S. meal delivery firm DoorDash will buy British rival Deliveroo for 2.9 billion pounds ($3.85 billion), the companies said on Tuesday, as they look to expand their reach and take on competition.
The companies rekindled talks last month after DoorDash approached Deliveroo with a 180 pence per share proposal, which was confirmed on Tuesday as the final offer, sending Deliveroo shares up about 2% to 175.6 pence per share.
Previous negotiations had ended in disagreement over Deliveroo’s valuation, Reuters reported last year.
DoorDash, which provides a restaurant delivery service through a mobile application, said it would not increase its offer, but reserved a right to do so if a third party emerged with a competing offer for Deliveroo.
The acquisition will help DoorDash grow its market share in Europe, competing against Just Eat and Uber Eats. Britain and Ireland are Deliveroo’s largest market, accounting for 62% of the value of its orders in its latest quarter.
Deliveroo’s shares have struggled since their debut when they were sold at 390 pence in 2021, a time when meal delivery services were boosted by the pandemic.
“Following careful consideration, the Deliveroo Independent Committee has unanimously decided to recommend this offer, considering it to be in the interests of all our shareholders and wider stakeholders,” its Chair Claudia Arney said in a statement.
Deliveroo has received undertakings of support from investors holding about 15.4% of shares, it said, including from founder and chief executive Will Shu, Greenoaks and DST Global.
However, Panmure Liberum analysts highlighted “the notable absence” of Deliveroo’s largest investor, Amazon, from this list, adding that they still see Amazon as the most likely counter-bidder.
Amazon, which has a 14.38% stake in Deliveroo, did not immediately respond to a Reuters request for comment.
In 2024, Deliveroo and DoorDash had orders worth about a combined $90 billion, the companies said.
Deliveroo’s other large markets include France and Italy, but the deal is not expected to face regulatory hurdles, as DoorDash has virtually no presence in Deliveroo’s 10 markets, a source told Reuters last month.
Will Shu, who co-founded Deliveroo in 2013 and leads the company, is set to receive about 172.4 million pounds for his 6.4% stake.
($1 = 0.7526 pounds)
(Reporting by Anuja Bharat Mistry, Pushkala Aripaka and Yamini Kalia in Bengaluru, and Milana Vinn; Editing by Eileen Soreng, Kirsten Donovan and David Evans)
