Deliveroo agrees £2.9bn takeover by US rival DoorDash

Food delivery giant Deliveroo has agreed to a takeover by its US rival DoorDash in a deal worth around £2.9 billion.

San Francisco-based DoorDash will pay 180p a share in cash for London-listed Deliveroo in a move set to create a combined firm with a presence across 40 countries and handling about 90 billion US dollars (£67.7 billion) of orders each year.

The firms said: “The combination with Deliveroo will strengthen DoorDash’s position as a leading global platform in local commerce, enabling the combined entity to better serve businesses, consumers and couriers.”

Deliveroo, which was co-founded by chief executive Will Shu in 2013, operates in nine countries and works with more than 130,000 riders across the world.

It made sales of around £2 billion in 2024.

Mr Shu is said to be in line for a £172 million windfall from his 6.5% stake in Deliveroo, while staff – who are believed to collectively hold around 36 million shares – are understood to be set for a £65 million payout.

Mr Shu said: “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.”

DoorDash was also set up in 2013, co-founded by chief executive Tony Xu, who has led the company ever since.

It operates in over 30 countries and delivers more than 2.5 billion orders a year, helping it notch up revenues of 10.7 billion US dollars (£8 billion) in 2024.

It does not operate in the countries covered by Deliveroo.

Mr Xu said: “I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together.

“We’ll cover more than 40 countries with a combined population of more than one billion people, enabling us to provide more local businesses with the tools and technology they need to thrive.”

The deal is expected to complete in the final three months of 2025 but will need to be approved by Deliveroo’s shareholders.

It comes after Deliveroo confirmed late last month that it had received an “indicative proposal” from US takeaway app firm DoorDash on April 5.

The 180p-a-share deal marks a 44% premium to the closing price of Deliveroo’s shares on April 4, before the approach was made by DoorDash.

Previously described in the market as “by no means a knockout valuation”, it follows a chequered time for Deliveroo since it listed in London four years ago, when it floated at £7.6 billion and then saw shares immediately drop.

The firms said the combined group would be able to “allocate resources more effectively to strengthen competitive advantage”.

DoorDash is expected to kickstart a six to 12-month review of the merged group on completion of the deal.

It said while it was too early to confirm the exact changes that would be made, it expects a potential reduction of around 1% to 3% of the combined workforce, largely in general administrative and business support roles.

“It is anticipated that efforts will be made to mitigate the need for redundancies through the standalone growth of the enlarged group, natural attrition, and the slowing or pausing of select hiring plans, and redundancies at Deliveroo are not expected to be material,” they said.

Some of Deliveroo’s offices and support functions would also no longer be needed, given that it would not be listed after the deal, which would result in a “small number” of job cuts, they added.

But the firms stressed that DoorDash does not plan to make major changes to Deliveroo’s London headquarters.

DoorDash also confirmed it would honour the agreement between Deliveroo’s riders and the GMB trade union.