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DoorDash Eyes UK Expansion with Potential Deliveroo Acquisition
DoorDash, the prominent food delivery service, has reportedly proposed acquiring its British counterpart, Deliveroo, for a sum of $3.6 billion (£2.7 billion). This potential acquisition could significantly reshape the competitive landscape of the European food delivery market. Deliveroo confirmed these discussions on Friday, indicating a preliminary stage in the negotiation process.
Deliveroo’s Response to the Acquisition Offer
According to a statement issued by Deliveroo, its board is currently engaged in deliberations with DoorDash regarding the proposal. While an official offer has not yet been formalized, the company stated that should a firm offer of £1.80 ($2.40) per share materialize, its board “would be inclined to endorse such an offer to Deliveroo stakeholders.”
- Deliveroo emphasized that there is no guarantee that a definitive offer will be presented.
- Shareholders are advised to refrain from taking any action concerning the potential transaction at this juncture.
Timeline for Decision
Deliveroo has granted DoorDash until May 23 to submit a firm offer, adding urgency to the ongoing discussions. This deadline underscores the seriousness of the acquisition talks and the need for a swift resolution.
DoorDash’s Market Position
DoorDash, headquartered in San Francisco, has established itself as the leading food delivery app in the United States. Key statistics highlighting DoorDash’s dominance include:
- 42 million active monthly users in 2024.
- $10.7 billion in revenue generated in 2024.
Founded in 2012, DoorDash operates in over 25 countries, demonstrating its global ambition and reach.
Previous Acquisitions
DoorDash’s history of strategic acquisitions includes the 2021 purchase of Wolt, a Finnish delivery company, for €7 billion (approximately $8.1 billion at the time) in stock. This acquisition reflects DoorDash’s strategy of expanding its market share through mergers and acquisitions.
Deliveroo’s UK Presence
Deliveroo, based in London and established in 2013, holds the position of the second-largest food delivery app in the United Kingdom. In 2024, the company reported:
- An average of 7.1 million active users.
- £2.07 billion in revenue.
Expansion into New Markets
In recent years, both DoorDash and Deliveroo have been actively diversifying their services beyond traditional restaurant deliveries. Their expansion efforts include venturing into:
- Grocery deliveries.
- Non-food deliveries.
This diversification strategy aims to broaden their user base and capture a larger share of the on-demand delivery market.
DoorDash’s Vision for the Future
DoorDash’s CEO, Tony Xu, expressed in a February interview the company’s ambition to become a “digital powerhouse,” highlighting the need to expand beyond its current core offerings. This suggests a long-term vision for the company that involves continuous innovation and market diversification.