Deliveroo could soon come under American ownership, after revealing it is in discussions with US food delivery giant DoorDash over a potential £2.7 billion buyout.
The board of Deliveroo announced that it had received an “indicative proposal” from DoorDash on 5 April. The approach values the London-listed company at £1.80 per share. In a statement issued with DoorDash’s consent, Deliveroo said that if a formal offer is made at this price, and agreement is reached on the other terms, the board “would be minded to recommend” the deal to shareholders.
Deliveroo confirmed that it is currently engaged in discussions with DoorDash and has provided the American company with access to due diligence. However, it stressed that there is “no certainty that any firm offer for Deliveroo will be made”.
“At this time, shareholders are advised to take no action in respect of the possible offer,” the statement added.
DoorDash has until 23 May to announce whether it intends to make a formal offer under UK takeover rules.
Deliveroo, co-founded by chief executive Will Shu in 2013, has grown into one of Britain’s most recognisable technology brands. Operating in nine countries, the company partners with around 135,000 riders worldwide, delivering food from restaurants and grocery stores to millions of customers.
The potential takeover comes at a time when Deliveroo has been facing mounting competition, margin pressures, and regulatory scrutiny across its key markets. Analysts have noted that the food delivery sector is undergoing a wave of consolidation as firms seek scale to drive profitability after years of rapid, but costly, expansion.
DoorDash, also founded in 2013, describes itself as a “technology company that connects consumers with their favourite local businesses in more than 30 countries across the globe”. It has made no secret of its ambitions for international growth, having previously acquired Finnish delivery platform Wolt in a major $8 billion (£6.3 billion) all-share deal in 2021.
Should the Deliveroo takeover proceed, it would mark a significant expansion of DoorDash’s footprint in Europe, allowing it to compete more aggressively against other major players like Uber Eats and Just Eat Takeaway.
Industry experts suggest that a combination of Deliveroo and DoorDash could create a formidable challenger in a fiercely competitive market. The two companies could benefit from increased scale, shared technology resources, and a wider restaurant network, while also driving efficiencies in logistics and operations.
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Nevertheless, any deal would likely be subject to scrutiny from regulators and competition authorities, particularly given the increasing focus on the working conditions and rights of gig economy workers. Deliveroo’s employment model, which treats its riders as self-employed contractors, has faced legal challenges in several countries.
Deliveroo went public on the London Stock Exchange in March 2021 in what was then hailed as one of the UK’s biggest tech IPOs. However, the flotation was widely regarded as disappointing, with shares plunging by more than 25% on their first day of trading. Since then, the company’s share price has struggled to regain momentum, making it an attractive takeover target for a larger, cash-rich rival.
In a letter to staff following the announcement, Mr Shu said: “DoorDash and Deliveroo share a commitment to supporting local businesses and providing great service to customers. We believe that by joining forces, we can create even greater opportunities for our partners, our riders, and our teams.”
More details are expected to emerge in the coming weeks as discussions continue. For now, Deliveroo shareholders are being urged to await further updates, with the possibility of a £2.7 billion buyout on the horizon.
