Doordash acquires British food delivery company Deliveroo for $3.9 billion

London – UK Food Delivery Company deliveroo It said on Monday it had agreed to a takeover offer from U.S. rival Doordash, which valued the company's £2.9 billion ($3.9 billion).

Deliveroo allows users to order hot meals and groceries through the app, saying its board of directors agrees to Doordash's offer to acquire all issued shares and will issue 180 pence per share in the company.

This marks April 4, the last working day before Doordash's first quote letter, with Deliveroo closing premium of 44%.

Deliveroo shares jumped to a three-year high last week after the company confirmed the company had received a Doordash acquisition offer.

The company said the deal value was delivered on a fully diluted basis.

Doordash said the financial terms of the acquisition are final and will not increase unless a third party enters with a competitor's bid.

Tony XU, CEO and Twenty Thousand Thousand Thousand Thousand said: “I’m even more excited about the prospect that Doordash and Deliveroo will be able to accomplish together. We will reach more than 40 countries with a population of more than 1 billion, allowing us to provide more local businesses with the tools and technologies they need to thrive.”

The acquisition agreement marks the end of Deliveroo's turbulent journey as a public company.

Once considered a British tech darling, Deliveroo saw 30% of its stock tanks in 2021 on one of the worst debuts on the London Stock Exchange. Since then, the stock has been falling more than 50% from the company's £3.90 IPO price.

Deliveroo is openly released while the UK is still feeling the impact of the Covid-19 lockdown, which has promoted the fate of various food delivery platforms. Investors question the sustainability of this growth in this post-resurrection world and see fierce competition in the market and legal challenges to the gig economy model as key risks to delivery.

For Doordash, getting Deliveroo marks a renewed effort to expand its overseas business by the US online takeaway app. Doordash acquired Finnish food delivery app Wolt in 2022 for 7 billion euros (US$7.9 billion).

More broadly, the food delivery sector has been in progress for several years. Earlier this year, Driveroo sold a portion of its Hong Kong units to the delivery hero, and Just in the East Agree to be acquired by investment group Prosus.