DoorDash Strikes $17 Billion Deal to Buy Instacart, Uniting Delivery Rivals in Its Biggest Bet on Groceries

DoorDash has agreed to buy grocery delivery company Instacart for about $17 billion in cash and stock, the companies said Thursday. The deal would combine two of the largest U.S. delivery platforms and is expected to face a lengthy antitrust review.

DoorDash will pay $65 per share for Instacart, which is formally known as Maplebear Inc. That is a 26% premium to Instacart's closing price on Oct. 22, the last trading day before media reports of a possible deal surfaced.

It is the largest acquisition in DoorDash's history.

Cash-heavy deal

At least 75% of the purchase price will be paid in cash, with DoorDash stock making up no more than 25%.

Instacart shareholders can choose one of three forms of payment for each share:

• All cash: $65
• All stock: 0.3372 DoorDash shares
• Mixed: $48.75 in cash plus 0.0843 DoorDash shares

Stock elections will be prorated if too many shareholders choose DoorDash shares.

DoorDash said it will fund the cash portion with cash on hand and new debt. JPMorgan Chase provided a commitment for a 364-day bridge loan. The deal does not depend on financing, and DoorDash said it aims to keep its investment-grade credit ratings.

'Grocery is one of the hardest things'

DoorDash co-founder and Chief Executive Tony Xu said the deal would strengthen the company's push into grocery delivery.

"Grocery is one of the hardest things to get right online," Xu said in a statement. He added that Instacart had spent years learning how to serve grocers well.

"It's still early innings, but we know that when more people shop local, more dollars stay local," Xu said.

Instacart Chief Executive Chris Rogers pointed to the company's history of working with retailers.

"Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow," Rogers said.

DoorDash said it expects to keep the Instacart brand, its app and its enterprise technology products for retailers.

Long road to closing

The companies expect the deal to close at the end of 2027 or in the first half of 2028, an unusually long timeline that suggests both sides expect a drawn-out regulatory review.

The deal needs approval from Instacart shareholders and must clear the U.S. Hart-Scott-Rodino waiting period. It also needs regulatory approvals in Canada and Israel.

Shareholders holding about 19% of Instacart's stock have agreed to vote in favor.

If the deal falls apart under certain circumstances, Instacart would pay DoorDash a $650 million termination fee, and DoorDash would owe Instacart $1.25 billion, Reuters reported.

Antitrust scrutiny expected

Analysts said regulators are the biggest obstacle.

"The main risk is regulatory approval," CFRA Research said in a note, adding that "the long closing window leaves the deal exposed to changes in policy."

Instacart controls about 70% of the U.S. third-party grocery delivery market, while DoorDash holds about 10%, according to Startup Fortune. The Federal Trade Commission is expected to examine the deal closely.

New York City's Department of Consumer and Worker Protection said a combination would continue a "troubling trend" of corporate consolidation, Reuters reported.

To address concerns from retailers, DoorDash pledged not to require grocers to use its delivery services exclusively.

The two companies discussed a combination in 2021, when talks reportedly valued Instacart far higher. Those discussions ended amid antitrust concerns. Instacart founder Apoorva Mehta has said the companies talked about joining forces on and off for years.

Why grocery matters

The deal reflects a broader shift as restaurant delivery growth slows.

"Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders," said Martin Szumski, an analyst at Morningstar.

Grocery orders tend to be larger and more frequent than restaurant orders. Delivery apps have struggled to make grocery profitable, however, and they face heavy competition from Walmart and Amazon.

Instacart also brings a fast-growing advertising business and software tools used by grocery chains to run their own online stores. Analysts say those businesses may be as valuable to DoorDash as the delivery marketplace itself.

The deal could complicate Instacart's partnership with Uber Eats, which began in 2024 and lets Uber users order groceries through Instacart. That arrangement would likely need to be renegotiated or unwound.

Key deal facts:

• Value: about $17 billion
• Price: $65 per Instacart share
• Premium: 26% to the Oct. 22 close
• Payment: at least 75% cash
• Expected closing: late 2027 or first half of 2028
• Breakup fees: $650 million (Instacart) and $1.25 billion (DoorDash)

DoorDash posts strong quarter

DoorDash announced the deal alongside its third-quarter results, which showed strong growth.

Revenue rose 34% to $4.6 billion. Total orders rose 28% to 993 million, and marketplace gross order value, the total value of orders on its platform, jumped 36% to $33.9 billion.

Net income attributable to common shareholders nearly doubled to $466 million. Adjusted EBITDA rose 41% to $1.06 billion.

For the fourth quarter, DoorDash forecast gross order value of $35.4 billion to $36.4 billion and adjusted EBITDA of $900 million to $1.1 billion.

Market reaction

DoorDash shares rose nearly 6% in early trading Thursday after the better-than-expected revenue, Reuters reported. The stock had fallen about 25% this year through Wednesday's close.

Instacart shares were little changed at about $58.35, well below the $65 offer price. That gap reflects investor caution about whether regulators will approve the deal. Instacart stock hit a record high of $62 on Monday after reports of talks emerged.

From IPO to takeover

Instacart went public in September 2023 at $30 per share, valuing the company at about $9.9 billion. That was far below the $39 billion valuation it reached as a private company during the pandemic delivery boom.

DoorDash has grown rapidly through acquisitions, including Finland's Wolt in 2022 and British delivery company Deliveroo last year.

If approved, the Instacart deal would make DoorDash a much bigger rival to Walmart and Amazon in U.S. grocery delivery. It would also test how far U.S. regulators are willing to let the largest delivery platforms consolidate.