Jobaaj Stories
In a groundbreaking move, the popular UK-based food delivery company Deliveroo has agreed to a £2.9 billion takeover by its US rival, DoorDash. This acquisition, which has been approved by Deliveroo’s board, marks a significant shift in the competitive landscape of the food delivery industry.
Key Highlights of the Deal
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Acquisition Value: £2.9bn
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Offer per Share: £1.80
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Staff Payout: £65.7m (from 36.5 million shares owned by current and former staff)
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CEO Payout: Will Shu, Deliveroo's CEO, stands to receive £172 million for his 6.4% stake in the company.
What Will This Mean for Deliveroo’s Employees?
For the 4,000 employees at Deliveroo, the deal brings a substantial financial boost. The staff will collectively receive nearly £66 million from the deal. While job cuts are expected (around 1-3% of the combined workforce), DoorDash has promised to minimize redundancies, focusing on natural attrition and slowing down hiring.
It is also expected that Deliveroo’s headquarters will remain in London, maintaining its presence in the UK despite the merger.
How Will DoorDash Benefit from the Acquisition?
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Expanded Reach: Combining both companies, DoorDash and Deliveroo will cover a total of 40 countries.
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Enhanced Market Position: DoorDash, already the largest food delivery app in the US, will strengthen its presence in the UK and European markets with Deliveroo’s established user base.
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Shared Vision: Both companies share similar strategic goals focused on customer satisfaction, from consumers to merchants and riders.
Impact on Deliveroo’s Market Value
The deal values Deliveroo at less than half of its value when it listed on the London Stock Exchange just four years ago. The company's initial public offering (IPO) was met with a rough start, seeing its stock fall by 26% on the first day of trading, earning it the nickname “Flopperoo”. However, the company has since made strides, including recording a £12 million profit in 2024, after several years of operating at a loss.
Future Plans: Will There Be Major Changes?
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Staff Contracts: DoorDash has promised to uphold existing contracts with Deliveroo’s riders, honoring their voluntary partnership agreement with the GMB union.
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Job Losses: While DoorDash aims to limit layoffs, the company anticipates a reduction of up to 830 positions, mainly in administration and business support roles.
What’s Next for Will Shu and Greg Orlowski?
Deliveroo’s co-founder and CEO, Will Shu, who initially started the company in 2013, is set for a significant payout. Shu, who once made deliveries himself during the company's early days, has described the deal as the start of a "transformative new chapter."
