London, UK – DoorDash, the US-based meal delivery leader, has agreed to purchase British rival Deliveroo for £2.9 billion ($3.9 billion), as the two companies seek to bolster their market position in Europe and intensify competition in the booming food delivery industry.

This acquisition will provide DoorDash with a stronger foothold in the European market, allowing it to compete more effectively against rivals like Just Eat and Uber Eats. Deliveroo, which generates the bulk of its business in Britain and Ireland, will add significant market share to DoorDash’s growing international presence. In its latest quarter, these two countries accounted for 62% of Deliveroo’s order value, with the company also maintaining a solid position in France and Italy.

The deal comes after DoorDash reignited acquisition talks with Deliveroo last month, offering 180 pence per share, a proposal that was confirmed as the final offer on Tuesday. Following the announcement, Deliveroo's share price saw a slight increase of around 2%, rising to 176 pence per share.

While DoorDash has confirmed it will not raise its current offer, the company has stated it retains the option to revise the bid if a competing offer emerges for Deliveroo.

Deliveroo’s stock has had a rocky performance since its initial public offering in 2021 when shares were priced at 390 pence amid a pandemic-driven surge in meal delivery services. Since then, the company has struggled to regain momentum in the competitive food delivery market.

Claudia Arney, Chair of Deliveroo, praised the deal, noting that after “careful consideration,” the company’s independent committee has unanimously recommended the offer, stating it is in the best interests of both shareholders and stakeholders alike.

Deliveroo has already secured backing from key investors, holding around 15.4% of the company's shares, including Deliveroo founder and CEO Will Shu, and prominent investors such as Greenoaks and DST Global. However, analysts have pointed out the notable absence of Amazon, Deliveroo’s largest shareholder, from this support list. Amazon, which holds 14.4% of Deliveroo, could potentially be a rival bidder, though it has yet to comment on the deal.

For 2024, both companies together are expected to generate about $90 billion in orders, highlighting the scale and potential of this acquisition.

As part of the deal, Will Shu, who co-founded Deliveroo in 2013, stands to receive approximately £172.4 million ($229.7 million) for his 6.4% stake in the company.