DoorDash Acquires Deliveroo in £2.9bn Deal, EU to Review Under Simplified Merger Procedure

DoorDash agreed to buy Deliveroo for £2.9bn ($3.9bn), expanding its reach in Europe. The European Commission will review the deal under its simplified merger procedure, indicating that it does not expect significant competition issues. This acquisition follows DoorDash's purchase of Wolt in 2022 and could help Deliveroo recover from a troubled stock market performance.

DoorDash has agreed to acquire UK-based food delivery company Deliveroo for £2.9 billion ($3.9 billion), significantly expanding its reach in Europe. The deal, announced last month, follows DoorDash's 2022 acquisition of Finnish delivery platform Wolt and aims to strengthen its presence in the European market [1].

The European Commission has announced that it will review the acquisition under its simplified merger procedure, indicating that it does not expect significant competition issues. This process is typically quicker and less burdensome than a full-scale merger review, suggesting that approval is probable [1].

Deliveroo's stock has faced challenges since its 2021 initial public offering (IPO), with its shares dropping by about 50% due to the post-pandemic decline in online food delivery demand. Meanwhile, DoorDash's shares have gained about 6.5% since the deal was announced, reflecting investor confidence in the strategic move [1].

The acquisition is expected to bring several benefits to DoorDash. Deliveroo's operations in nine European countries, including the UK, France, and Singapore, complement DoorDash's existing footprint in 30+ nations. The combined entity will serve 50 million monthly active users across 40+ countries, creating a platform with access to over 1 billion people [3].

However, the deal also faces regulatory scrutiny in both the EU and the UK. The European Commission's simplified merger review process suggests minimal antitrust concerns, but the UK's Competition and Markets Authority (CMA) may probe the merger's impact on gig workers. Deliveroo's reliance on independent contractors contrasts with DoorDash's pilot programs for direct employment in the U.S., raising questions about labor practices [3].

The proposed acquisition is valued at a high multiple of 13.4x EV/EBITDA, based on Deliveroo's 2025 guidance. This suggests investors are paying for future growth potential rather than current profitability. However, the deal's success will hinge on DoorDash's ability to integrate Deliveroo's operations without diluting its value proposition and to navigate regulatory challenges [3].

For investors, the DoorDash-Deliveroo merger presents a dual-edged sword. While the combined entity's scale could drive long-term value through operational efficiencies and cross-border innovation, the premium paid for Deliveroo raises concerns about overvaluation. DoorDash's market capitalization of $93.1 billion as of May 2025 reflects confidence in its ability to execute such a transformation [3].

In conclusion, DoorDash's acquisition of Deliveroo is a bold move to redefine the global food delivery landscape. While the deal's immediate financials are ambitious, its long-term success will depend on the combined entity's ability to innovate, adapt to regulatory pressures, and maintain profitability in a sector where margins are razor-thin. Investors should monitor the regulatory timeline and the combined entity's integration progress, as a successful execution could justify the premium.

References:
[1] https://stocktwits.com/news-articles/markets/equity/door-dash-s-deliveroo-deal-could-clear-european-regulatory-hurdle-as-eu-opts-for-simplified-review/chsgQtzRdgW
[2] https://inshorts.com/en/news/doordash-s--3-9-bn-deliveroo-deal-enters-eu-s-simplified-review-1755598550676
[3] https://www.ainvest.com/news/strategic-rationale-investment-implications-doordash-takeover-deliveroo-2508/