The food delivery company Deliveroo has agreed a £2.9bn takeover by its US rival DoorDash that will result in a near-£66m payday for its staff.
The London-based delivery company, which was founded in 2013 by Will Shu and Greg Orlowski, received an offer worth 180p a share last month and on Tuesday its board recommended the deal to shareholders.
Former and current Deliveroo staff own 36.5m shares in the business between them, which would mean a £65.7m payout if the deal goes ahead.
Shu is in line for a £172m payout from his 6.4% shareholding in the business. He said: “We are now at the beginning of a transformative new chapter. DoorDash and Deliveroo are like-minded organisations with a shared strategic vision and aligned values.”
The takeover values Deliveroo, which employs about 4,000 people, at less than half the value at which it floated on the London Stock Exchange four years ago. Together, the two companies will cover 40 countries.
The deal could result in job losses equivalent to between 1% and 3% of the combined workforce of 27,700, affecting up to 830 people, mainly in administration and business support roles.
DoorDash said it would aim to limit redundancies and make any cuts by not replacing people who leave, and pausing or slowing hiring. A small number of headquarters and support jobs related to Deliveroo’s status as a publicly listed company will also go. Its headquarters is expected to stay in London.
DoorDash is the biggest food delivery app in the US, and was also founded in 2013. The San Francisco-based company has 23,700 employees, and more than 1 million riders who deliver food in 30 countries, as well as more than 42 million active users of its app.
DoorDash said it would abide by the voluntary partnership agreement between Deliveroo and the GMB union, and does not plan to make any material changes to contracts with riders.
Tony Xu, the chief executive and co-founder of DoorDash, said he had “long admired” Deliveroo’s team. “Like DoorDash, Deliveroo is obsessively focused on their customers – consumers, merchants and riders,” he added.
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Shu, a former investment banker who came up with the idea for the app because of the lack of late-night food options while he was working long hours, set up Deliveroo with Orlowski, a childhood friend. He made deliveries by scooter for the service in its early months.
Deliveroo works with 176,000 restaurants, grocers and retailers, and has more than 130,000 riders who served 7 million active consumers a month last year. It operates in nine countries: Belgium, France, Italy, Ireland, Kuwait, Qatar, Singapore, the United Arab Emirates and the UK. Deliveroo made its first annual pre-tax profit in 2024, of £12m, with revenues of £2.1bn.
The UK company thrived during the Covid-19 crisis when restaurants were shuttered during lockdowns, leading to a boom in meal deliveries, but demand has declined since pandemic restrictions were lifted.
Deliveroo listed in 2021 at 390p a share, but flopped on the first day of trading in a 26% share slump that earned it the nickname “flopperoo”.
Source: theguardian.com
