Deliveroo has agreed terms for a £2.9bn takeover by US-based delivery platform DoorDash.
It emerged just over a week ago that a deal was on the table.
DoorDash said on Tuesday that its 180p-per-share offer was final though it reserved the right to raise it should a rival bidder emerge.
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The offer represented a 44% premium to the value of Deliveroo’s shares on 4 April – the day before it approached the company with its takeover proposals.
The offer, which was unanimously agreed by an independent board, is being recommended to shareholders.
Deliveroo co-founder and chief executive, Will Shu, stands to make more than £170m from his holding if the sale progresses as expected later this year.
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The deal is aimed at expanding the DoorDash brand into Europe for the first time, scrapping for market share with rivals including Just Eat and Uber Eats.
Deliveroo operates in nine countries and handled orders worth £2bn last year.
The combined firm will have a presence across 40 countries, with annual orders worth around £10bn.
It was not immediately clear whether the Deliveroo brand name would survive.
Tony Xu, CEO and co-founder of DoorDash, said “The enlarged group will bring together DoorDash’s strong operating playbook with Deliveroo’s local expertise to invest in innovation and execution at an even higher level.
“Together, we will work to deliver the best experience for all of our stakeholders, to grow the GDP of cities around the world, and to build the leading global platform for local commerce.”
Mr Shu added: “I’m very proud of everything we have achieved as a standalone business.
“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. Together, we will be even better positioned to serve consumers, merchants, riders and local communities. The Enlarged Group will have the scale to invest in product, technology and the overall consumer value proposition.
“I want to thank all of our incredibly skilled people, dedicated riders and merchants and our loyal consumers for helping us to build the successful business we have today. I hope they share our excitement about what the future holds. I know that DoorDash will be a great long-term partner for our business.”
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Market analysts have long seen Deliveroo as a target due to the company’s share price struggles since its flotation in 2021 – a time when a COVID-led surge in demand for deliveries had tailed off.
Deliveroo’s shares had weakened nearly 50% since their market debut ahead of the offer.
Shareholders will have to vote on the deal but it is not expected to face regulatory hurdles as it provides DoorDash access to 10 new markets where it currently has no presence.
The takeover will represent a blow to the City of London, given the loss of a tech-focused player.
Deliveroo shares were trading up 2%, at 175p, in early Tuesday trading.
