Doordash Inc., which controls two-thirds of the restaurant delivery market in the United States United States, has agreed to buy the food delivery platform Deliveroo Plc headquartered in UK for a share value of around £2,9 billion ($3,9 billion), in a bid to expand its presence in international markets and face competition.
DoorDash has offered 180 pence in cash per share of Deliveroo, the company announced today in a statement, confirming the terms of an offer announced on April 25. This is a 29% bonus compared to Deliveroo's closing share price on April 24. The deal is subject to regulatory and shareholder approval.
Through the acquisition, DoorDash, which provides a restaurant delivery service via a mobile app, will expand its presence from the United States to more than 40 countries around the world, the company said. The two companies reported a gross book value of orders of about $90 billion last year and boast 50 million monthly active users. The acquisition will help DoorDash increase its market share in Europe, competing with Just Eat e Uber Eats. Great Britain and Ireland are the largest markets for Deliveroo, representing 62% of order value in the last quarter.
The actions of Deliveroo closed at 172,10 pence on Friday in London, while the London market was closed yesterday for a public holiday. The stock is up 21% since the beginning of the year. Doordash gained 31 cents to close at $205,40 on Monday, leading the 22% annual earnings.
15,4% of the votes were collected, but Amazon, the most likely counter-bidder, was still missing
DoorDash said its offer is final and will not be increased unless another bidder comes forward for the British company. Executives at Deliveroo, including Chief Executive Officer Will Shu, have agreed to tender their shares in the deal and Doordash he declared that he had already received the consensus of investors representing 15,4% of the share capital. The deal requires the approval of the owners representing 75% of Deliveroo's shares. However, analysts at Panmure Liberum highlighted the "noticeable absence" from this list of Deliveroo's largest investor, Amazon, adding that they continue to consider Amazon the most likely counter-bidder.
Amazon, which holds a 14,38% participation% in Deliveroo, did not immediately respond to Reuters' request for comment.
“After careful consideration, Deliveroo's independent Committee has unanimously decided to recommend this offer, believing it is in the best interests of all our shareholders and wider stakeholders,” said the President Claudia Arney in a note.
Le Deliveroo shares have struggled since their debut, when they sold for 390 pence in 2021, a period when food delivery services were boosted by the pandemic. Deliveroo shares tumbled in March after it reported earnings well below analysts’ estimates; the company exited the Hong Kong market due to disappointing sales and growing competition.
The proposal is the latest example of Consolidation in the sector, after that prosus NV in February has agreed to acquire Just eat takeaway.com NV of Amsterdam. Food delivery companies are being pressured to merge after a rapid acceleration during the pandemic lost momentum in the years that followed. A new generation of global players with deep pockets are now competing to win customers across borders.
