SAN FRANCISCO, California: U.S. food delivery giant DoorDash will acquire British rival Deliveroo in a US$3.85 billion deal, the companies said this week, as consolidation accelerates in the pressured meal delivery market.

DoorDash revived talks with Deliveroo last month, offering 180 pence per share — now confirmed as the final offer. Deliveroo's stock rose about two percent on the news but remained below the offer price. The shares, initially listed at 390 pence in 2021, have struggled since the pandemic.

Deliveroo CEO Will Shu defended the valuation, saying, "That was a different time, (and) a different interest rate environment." Despite believing in Deliveroo's potential, he acknowledged the company's need to scale globally to compete: "We thought this was the right place for us."

The acquisition adds Britain and Ireland — Deliveroo's largest markets — to DoorDash's European footprint as it battles Eat and Uber Eats. "We have the possibility to introduce new products to the market," said DoorDash CEO Tony Xu.

Together, Deliveroo and DoorDash processed about $90 billion in orders in 2024, with seven million and 42 million monthly active users, respectively.

The deal arrives amid broader consolidation in the sector. "Only the strongest will survive," said Russ Mould of AJ Bell, noting many players have chased the same opportunity.

In a separate move, DoorDash announced a $1.2 billion acquisition of hospitality software firm SevenRooms. Uber (UBER.N) also revealed plans to buy an 85 percent stake in Trendyol's food delivery business in Turkey for about $700 million.

DoorDash shares fell seven percent after it issued a wide Q2 profit forecast of $600 million to $650 million in adjusted EBITDA, versus analysts' $627 million estimate. While demand remains solid, DoorDash said it was "conscious of the potential for changes in consumer demand."

Deliveroo has secured support from investors holding 15.4 percent of the shares, including Shu, Greenoaks, and DST Global. DoorDash said it won't raise its bid unless a rival offer appears.

Amazon, Deliveroo's largest shareholder with a 14.38 percent stake, declined to comment. Analysts see Amazon as a potential counterbidder.

Shu, who co-founded Deliveroo in 2013, will receive 172.4 million pounds for his 6.4 percent stake. He has not yet disclosed his plans following the deal.

The deal is not expected to face regulatory challenges.