DoorDash Expands Its Reach by Acquiring UK Food Delivery Service Deliveroo for $3.9 Billion

The American food delivery aggregator DoorDash has acquired its British competitor Deliveroo for $3.9 billion, aiming to expand its operations beyond the United States. Deliveroo’s board has approved DoorDash’s proposal to purchase all issued and planned securities at a price of $2.40 per share.

Following the acquisition news, Deliveroo’s stock surged to a three-year high.

Tony Xu, the CEO and co-founder of DoorDash, stated that the combination of their services with Deliveroo will cover more than 40 countries with a combined population exceeding 1 billion people. This merger is expected to provide a greater number of local establishments and shops with the necessary tools and technologies to thrive, Xu noted.

Deliveroo was launched in 2013 and operates not only in the UK but also in several EU countries, Singapore, the UAE, and others. In 2021, Deliveroo’s stock fell by 30%, and it has continued to decline—down 50% since the company went public on the London Stock Exchange.

The COVID-19 pandemic allowed food delivery companies to increase their revenues. However, with the lifting of pandemic restrictions, investors began to question the sustainability of this growth.

By acquiring Deliveroo, DoorDash is continuing its strategy to enhance its international presence. In 2022, the American company purchased the Finnish delivery service Wolt for $7.9 billion.

Earlier this year, Uber filed a lawsuit against DoorDash, accusing it of suppressing competition by intimidating restaurants into working exclusively with them. According to Uber, DoorDash threatens establishments with multimillion-dollar fines, removal from the app, and lowered ratings.