DoorDash to Buy Instacart for $17 Billion in Major Delivery Deal
Two of the biggest names in delivery are joining forces. DoorDash has agreed to buy Instacart in a deal valued at about $17 billion, bringing together America's go-to apps for restaurant takeout and grocery delivery.
The companies announced the deal Wednesday after days of reports that the two were in advanced talks. Instacart's board unanimously approved the acquisition.
The Deal Terms
DoorDash will pay $65 per share for Instacart, which officially goes by the name Maplebear Inc. That price is a 26% premium over Instacart's closing stock price on Oct. 22, the last trading day before news of the talks broke, according to a DoorDash announcement.
At least 75% of the deal will be paid in cash. Instacart shareholders can choose to receive $65 in cash, 0.3372 shares of DoorDash stock or a mix of both for each share they own. DoorDash plans to pay for the cash portion using money on hand and new debt, backed by a financing commitment from JPMorgan Chase.
Instacart had also held talks with Uber, but those discussions were "no longer active," a source told Reuters, according to KSL. When word of the DoorDash talks first spread, Instacart's stock jumped about 8%, while DoorDash shares fell about 6%.
What It Means for Customers
For now, nothing changes. The two companies will continue operating separately until the deal closes, which is not expected until the end of 2027 or the first half of 2028.
After that, DoorDash says it plans to keep the Instacart brand and app. Instacart customers would gain access to more than 50,000 additional stores, on top of the nearly 100,000 already on the platform.
The companies also plan to combine their membership programs, DashPass and Instacart+, into a single fee. DoorDash estimates that would save members about $100 million a year.
"Grocery is one of the hardest things to get right online," DoorDash co-founder and CEO Tony Xu said. He added that when more people shop locally, more money stays in local communities.
Instacart CEO Chris Rogers said the combination would pair "purpose-built grocery technology and trusted retailer and brand relationships" with DoorDash's delivery network, OfficeChai reported.
Taking On Amazon and Walmart
The companies are pitching the deal as a way to help local grocers compete with retail giants like Amazon and Walmart, which have built their own delivery fleets, warehouses, membership programs and AI shopping tools.
Under the plan, grocers of all sizes could use DoorDash's delivery network along with Instacart's grocery technology, advertising and AI tools, both in the two apps and on their own websites.
DoorDash has also promised that local grocers will remain free to use any delivery platform they choose, with no exclusive contracts required.
The deal is the latest in a wave of consolidation across the delivery industry. DoorDash previously bought the European delivery company Deliveroo, while Uber has acquired Postmates and Delivery Hero as companies race to expand beyond restaurant meals into groceries and retail.
What About Workers and Regulators?
DoorDash says Instacart shoppers will keep their current flexibility and tools, and can choose whether to take DoorDash orders or stick only with Instacart.
Both companies have faced scrutiny over how they treat workers. In September, DoorDash agreed to pay $131.5 million to settle claims it underpaid New York City delivery workers. Earlier this month, Instacart agreed to pay $5 million over claims it favored visa holders in hiring.
The deal still needs approval from Instacart shareholders, though holders of about 19% of Instacart's shares have already agreed to vote in favor. It also needs sign-off from regulators in the U.S., Canada and Israel. Given the size of both companies, it is likely to face close scrutiny over its impact on competition in grocery delivery.
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