DoorDash has agreed to buy its grocery-delivery rival Instacart in a deal valued at about $17 billion, the companies announced on Thursday, October 29. It is one of the biggest consolidation moves yet in the US delivery business, and it will take a long time and several regulatory approvals before anything changes for customers.
The terms. According to DoorDash’s announcement, Instacart shareholders will receive $65.00 per share, which DoorDash says is a 26% premium to Instacart’s closing price on October 22, the last trading day before media reports about a possible deal. Instacart’s board approved the agreement unanimously. At least 75% of the payment will be cash. Shareholders can choose all cash, DoorDash shares at a ratio of 0.3372 per Instacart share, or a mix of $48.75 in cash and 0.0843 DoorDash shares, with stock capped at 25% of the total. TechCrunch and Engadget also reported the $17 billion figure.
How it will be paid for. DoorDash says it will use cash on hand and debt, supported by a 364-day bridge loan commitment from JPMorgan Chase. The deal has no financing condition, and DoorDash says it intends to keep an investment-grade credit rating.
Not happening soon. The companies expect the deal to close in late 2027 or the first half of 2028. It needs Instacart shareholder approval, the expiration of the US antitrust waiting period under the Hart-Scott-Rodino Act, and approvals in Canada and Israel. Holders of about 19% of Instacart’s shares have already agreed to vote in favor. Regulators could scrutinize a combination of two of the largest players in app-based delivery, though the announcement does not describe any regulator’s reaction.
What DoorDash says changes. For grocers and merchants, the combined company says it would pair DoorDash’s delivery network with Instacart’s grocery technology, advertising and AI tools, including on stores’ own websites, and add capacity through DoorDash’s DashMart Fulfillment Services. It says Instacart customers would gain access to more than 50,000 additional stores, and that grocers would face no exclusivity requirements.
For shoppers, the DashPass and Instacart+ memberships would merge into one, which DoorDash estimates would save members about $100 million a year in total. Instacart’s brand, enterprise products and app are expected to stay after the deal closes. For the people who do the deliveries, DoorDash says couriers and in-store shoppers would get more orders and more control over when and how they work, and that Instacart shoppers would keep their current flexibility and could choose whether to take DoorDash orders. These are the companies’ own claims and have not been tested.
What the executives said. DoorDash CEO Tony Xu framed the deal around local shopping, saying that when more people shop local, more dollars stay local. Instacart CEO Chris Rogers said the combination would let the companies accelerate innovation across the grocery industry.
Why it matters. Grocery delivery has been a crowded, thin-margin business in which rivals compete on fees, membership perks and the share of the shopping basket they can capture. Merging memberships, networks and advertising could give the combined company more bargaining power with grocers and brands. Whether that benefits shoppers through lower costs or hurts competition is exactly what regulators are likely to weigh over the next year or more.
What to watch. Look for the antitrust review, the shareholder vote, the election results on cash versus stock, and any commitments the companies make to grocers and couriers before the deal is cleared.
Sources: DoorDash, TechCrunch and Engadget. Deal terms are as announced by the companies.
Instacart curbside pickup at a Publix store in West Miami, Florida (file image), Wikimedia Commons, CC BY 2.0
