DoorDash Proposes $3.6 Billion Acquisition of Deliveroo

U.S.-based DoorDash has made a formal offer to acquire British meal delivery giant Deliveroo for £2.7 billion ($3.60 billion), according to Reuters. The proposal, which was submitted on April 5, values Deliveroo at 180 pence per share.

Deliveroo’s board of directors has since reviewed the offer and is expected to recommend it to the company’s shareholders, contingent on the successful negotiation of other terms surrounding the deal, Reuters reported. According to an insider, JPMorgan is providing advisory services to DoorDash in connection with the acquisition proposal.

This move marks the first formal approach for Deliveroo since the summer, when previous discussions had taken place but no official offer had been made. Deliveroo’s performance has been under scrutiny in recent months, particularly after the company saw a sharp decline in its share price, which has fallen by nearly 50% since its initial public offering in 2021. The downturn is largely attributed to stagnating demand for online food delivery services post-pandemic, along with a broader shift in investor interest toward more profitable ventures, as per Reuters.

Read more: Uber Sues DoorDash Over Delivery Market Control

In a further sign of the company’s ongoing restructuring, Deliveroo exited the Hong Kong market in March, selling part of its assets to foodpanda, a subsidiary of Delivery Hero. The Hong Kong operations had been underperforming and accounted for just 5% of Deliveroo’s overall transactions.

On Friday, Deliveroo’s shares closed at 146.6 pence, which remains significantly lower than their initial offering price. This decline in share value has made the company more vulnerable to takeover proposals, with DoorDash now looking to capitalize on the opportunity.

Source: Reuters