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Restaurant-to-door delivery company Deliveroo has agreed to a £2.9 billion takeover by its US rival DoorDash. The deal, which values Deliveroo at 180p per share, represents a 44% premium over its share price prior to the announcement of takeover talks last month.

However, this valuation is notably lower than the 390p per share price at which Deliveroo initially floated on the London Stock Exchange in April 2021.

The merger is poised to create a formidable competitor in the global food delivery market, with the combined entity operating in over 40 countries and serving approximately 50 million customers monthly. Analysts suggest that this consolidation could intensify competition against existing rivals such as Just Eat and Uber Eats, particularly in the UK market.

DoorDash's acquisition of Deliveroo comes at a time when the company is seeking to bolster its position as a leader in local commerce. The integration of Deliveroo's operations, which include a network of over 130,000 delivery riders and a diverse range of restaurant partnerships, is expected to enhance DoorDash’s scale and technological capabilities.

Reported by the BBC, the two firms said: “The combination with Deliveroo will strengthen DoorDash's position as a leading global platform in local commerce”.

Will Shu, co-founder and CEO of Deliveroo, described the deal as "transformative" in a statement to the BBC, noting the potential for increased investment in product development and consumer value.

This acquisition is indicative of a broader trend where UK-listed firms are being absorbed by US companies, raising concerns about the attractiveness of the UK market for investment.

The financial performance of both companies underscores the strategic importance of this merger. Deliveroo reported sales of approximately £2 billion in 2024, while DoorDash achieved revenues of around £8 billion in the same year. As both companies began as food delivery services, DoorDash's expansion into a larger local commerce platform presents a challenge for competitors in the space.

Matt Britzman, a senior equity analyst at Hargreaves Lansdown, told BBC that DoorDash's acquisition could "rattle Uber" and reshape the competitive landscape in the UK. With no competing bids currently in sight, the deal appears to be a calculated move aimed at solidifying DoorDash's market position and accelerating growth.

The acquisition is also expected to have significant implications for Deliveroo's employees, with some staff members poised to receive substantial payouts as part of the transaction. According to BBC reports, CEO Will Shu stands to gain approximately £172.4 million from his 6.4% stake in the company, highlighting the financial stakes involved in this deal.