Food delivery giant DoorDash has tabled an offer of $3.6 billion to acquire Deliveroo in a deal that would see the San Francisco-based company expand its reach across Europe and the Middle East.
Deliveroo said in a filing with the London stock exchange on Friday that DoorDash had proposed a cash offer of £1.80 ($2.40) per share to acquire the London-based company. Deliveroo also said that if a firm offer is submitted at that price, its board “would be minded to recommend” it to the company’s shareholders.
DoorDash’s offer values Deliveroo at roughly $3.6 billion based on the company’s 1.5 billion outstanding shares. The bid represents a premium of almost 23% to Deliveroo’s closing price on Friday.
But Deliveroo’s filing points out that there can be no certainty that any firm offer will be made. Deliveroo’s board will engage in talks with DoorDash over its possible offer and provide access to due diligence.
DoorDash has until May 23 to make a firm offer under U.K. takeover rules and would still need to gain regulatory approval to complete the deal.
Deliveroo, which was founded in 2013, says it operates across nine markets, including Belgium, France, Italy, Ireland, Kuwait, Qatar, Singapore, the United Arab Emirates and the U.K. The company exited Hong Kong in April last year.
Deliveroo also says in its recent filings that it’s currently working with 186,000 restaurants and retail partners, while operating a network of 135,000 riders.
DoorDash has operations in more than 30 countries, but its billionaire cofounder and CEO Tony Xu told Bloomberg in February last year that it hadn’t gained the same level of consumer awareness and engagement in its overseas markets as it had in the U.S. “We’re not very well penetrated in any one of those countries,” Xu said at the time.
In 2022, DoorDash bolstered its presence overseas when its purchased the Finnish food-delivery company Wolt Enterprises Oy in an all-stock deal that was valued at about $8 billion. Wolt continues to operate as a sub-brand of DoorDash in Europe and Asia.
DoorDash had reportedly been in talks over a possible deal to acquire Deliveroo in mid-2024, but the two sides couldn’t reach an agreement on valuation.
Deliveroo’s listing on the London Stock Exchange in March 2021 valued the company at $10.4 billion, but the stock is down about 62% since then.
Last month, Deliveroo managed to report its first annual profit despite operating in what it called an uncertain consumer environment. The company booked a profit of £2.9 million for 2024 on revenue of £2.07 billion.
In February, Deliveroo denied speculation that its founder William Shu was going to step down as CEO this year, following a report that the company’s board was considering his replacement.
DoorDash was founded in 2013 and went public in 2020 in a highly anticipated IPO that turned Xu and cofounders Andy Fang and Stanley Tang into billionaires. Xu has the largest stake in the company, giving him a net worth of $2.3 billion, according to Forbes’ Real-Time Billionaires list. Fang and Tang are estimated to be worth $1.5 billion and $1 billion, respectively.
Xu turned DoorDash into the dominant food delivery platform in the U.S. by adopting contrarian strategies like going after suburban areas and chain restaurants, while its two biggest rivals UberEats and GrubHub focused on independent restaurants in coastal cities.
DoorDash recently announced that its monthly active users had reached an all-time high of 42 million, and its revenue rose to $10.7 billion in 2024.