In a move to bolster its international footprint, DoorDash Inc. DASH is on the brink of acquiring UK-based food delivery firm Deliveroo in a deal valued at $3.9 billion.
What Happened: Deliveroo has given its nod to a takeover bid from DoorDash. The deal pegs Deliveroo’s worth at £2.9 billion ($3.9 billion), with DoorDash set to acquire all existing and future shares at 180 pence per share.
Post the announcement, Deliveroo’s shares skyrocketed to a three-year high. DoorDash confirmed that the financial terms of the acquisition are final and will only be reconsidered if a third party presents a competing offer.
Tony Xu, CEO and Co-founder of DoorDash, stated, “I could not be more excited by the prospect of what DoorDash and Deliveroo will be able to accomplish together. We’ll cover more than 40 countries with a combined population of more than 1 billion people.”
The acquisition marks the conclusion of Deliveroo’s rocky tenure as a public company, during which its shares plummeted 30% in 2021, making it one of the worst trading debuts in London Stock Exchange history.
For DoorDash, this acquisition signals a renewed effort to grow its global footprint, building on its 2022 purchase of Finnish food delivery app Wolt for 7 billion euros ($7.9 billion).
Why It Matters: This acquisition comes on the heels of DoorDash’s recent partnership with Domino’s Pizza Inc. DPZ in April, which analysts predicted would fuel growth for the pizza chain.
The Deliveroo acquisition further solidifies DoorDash’s position in the global food delivery market, providing it with a stronger foothold in the U.K. and enhancing its service capabilities across more than 40 countries.
DoorDash is scheduled to report its first-quarter 2025 earnings on Tuesday, May 6, before the market opens. Bank of America Securities analyst Michael McGovern maintained a Buy rating on DoorDash, Inc., setting a price target of $235. He projects gross order value (GOV)/ EBITDA at $23 billion/ $582 million, slightly above the street consensus of $22.9 billion/ $586 million.
Benzinga's Edge Rankings highlight strong momentum and growth rankings for DoorDash in the 95th and 73rd percentiles, respectively. Curious how other stocks stack up? Click here to uncover growth and momentum scores for top stocks.
Over the past month, DoorDash stock surged 23.5%.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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