DoorDash agrees to buy Instacart for about $17 billion, a deal that would reshape U.S. grocery delivery

DoorDash said Thursday it will acquire Instacart in a deal that values the grocery delivery company at about $17 billion¹². The offer is $65 per share, 26% above Instacart’s closing price on Oct. 22, the last trading day before reports that a deal was being discussed². Instacart’s board unanimously approved the agreement, and stockholders holding about 19% of its shares have agreed to vote in favor².

How the deal is structured

At least 75% of the price is to be paid in cash². Instacart shareholders can choose among three options for each share: $65 in cash, 0.3372 DoorDash shares, or $48.75 in cash plus 0.0843 DoorDash shares, with DoorDash stock capped at 25% of the total and oversubscribed elections reduced proportionally².

The companies expect the transaction to close at the end of 2027 or in the first half of 2028². It needs Instacart shareholder approval, the expiration or termination of the waiting period under the Hart-Scott-Rodino antitrust law, and other regulatory approvals, including in Canada and Israel².

AP reported that the Instacart brand and app would remain, and that about 600,000 shoppers, who work as independent contractors, would continue to fulfill orders¹. Customers who now pay $9.99 a month for separate DashPass and Instacart+ memberships would pay a single fee, and Instacart customers would gain access to 50,000 more stores on DoorDash’s platform¹.

Market position

DoorDash, founded in San Francisco in 2013, operates in 40 countries, completed more than 3 billion orders last year with 9 million independent delivery workers, and has a market value of $73 billion, AP reported¹. Instacart, founded in 2012, fulfilled 338 million orders last year in the United States and Canada¹. According to research firm Consumer Edge, cited by AP, Instacart’s share of U.S. delivery platform spending fell from 26% to 18% over five years, while DoorDash’s rose from 44% to 59%; Uber Eats held just under 20%¹. On Thursday afternoon, DoorDash shares rose about 5% and Instacart shares fell about 1.6%¹.

Competition questions

DoorDash chief executive Tony Xu argued the deal could help local grocers compete with larger players, saying it could “give every retailer a fighting chance at competing in the modern-day era”¹. In the company’s announcement, Xu said, “Grocery is one of the hardest things to get right online,” and Instacart chief executive Chris Rogers said that together the companies can “accelerate innovation across the grocery industry”².

Outside analysts were more cautious. Randall Sargent of the consulting firm Oliver Wyman said that, as a general economic principle, “less competition and more consolidation tends to be worse for consumers”¹. Antitrust attorney Ethan Litwin warned that DoorDash’s control of Instacart’s technology could allow it to cut off rivals or monitor competitors’ pricing¹. Walmart holds 21% of U.S. grocery spending, and Costco and Amazon 8% each, according to Numerator data cited by AP¹.