Late last month, US-based meal delivery company Doordash offered to acquire UK-based Derveoo for $3.6 billion.
Derveroo confirmed on Tuesday that it had accepted an offer of all cash from Doordash. This valued the company at £2.9 billion ($3.9 billion). The trading price is 180p each, with shares being distributed at a rate of 44% more than the closing price on April 4th. That was the last trading day before Doordash officially made the approach.
The news rose nearly 2% on Monday in delivery stocks, closing the recent rally, pushing the stock to a three-year high, CNBC reported.
Doordash said the offer is final if it is not a competing bid surface.
“We couldn’t be more excited about what Doordash and Derveoo can achieve together, said Tony Xu, CEO and co-founder of Doordash, covering more than 40 countries with a population of over 1 billion people.
The deal is a major chapter in Derriboroo, which has been running in turbulence since its release in 2021. When promoted as one of the UK’s top tech companies, the IPO suffered a brutal 30% drop on the first day. The stocks never recovered completely, and are well below the IPO price of £3.90.
Founded in 2013 by Will Shu and Greg Orlowski, Derveoo operates in more than 20 countries, including major markets such as Australia, France, Germany and the UK. The company generates revenue by charging restaurants fees and charging customers fees. The company operates in over 500 towns and cities across 14 markets.
The company’s debut came at a strange time. Food delivery apps thrived during lockdowns, but investors’ sentiment began to change as restrictions eased. The legal scrutiny and growing competition in the gig economy are just adding pressure.
For Doordash, this is another step in an international push. In 2022, it won the Finnish delivery app Wolt for 7 billion euros ($7.9 billion), and Doordash won a non-slowing acquisition signal.
Meanwhile, the food delivery industry continues to consolidate. Earlier this year, Deliveroo sold some of its Hong Kong units to streaming heroes. Just Eat is also reported in a lecture that Prosus will win it.
Doordash’s shares fell slightly to pre-US market trading after the announcement.
If approved, the merger will create one of the world’s largest food delivery networks once reaching reach across more than 40 countries.
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