DoorDash agrees to acquire grocery delivery rival Instacart for $17B
DoorDash said on Thursday it would buy Instacart in a deal valued at about $17 billion, stepping up its push into the fast-growing US grocery delivery market as competition among app-based platforms intensifies.
Heightened competition following a slowdown in orders from pandemic-era peaks, along with rising costs and tougher regulatory scrutiny over the treatment of gig workers, has spurred a wave of dealmaking across the industry.
Meanwhile, delivery companies chasing growth are expanding into grocery, convenience and other retail categories as their core food-delivery businesses mature.
“Grocery is one of the hardest things to get right online,” said Tony Xu, co-founder and CEO of DoorDash, adding Instacart has spent years learning to do that well for grocers.
Online grocery delivery has also gained traction as consumers increasingly prize convenience, while a recent surge in gasoline prices linked to disruptions from the war in Iran could give shoppers another reason to avoid trips to stores.
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DoorDash has offered Instacart shareholders $65 per share held, representing a premium of about 26% to the stock’s closing price on October 22 before reports of deal talks first emerged.
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The consideration will be at least 75% cash, with Instacart shareholders able to elect cash, DoorDash stock or a combination of the two, the companies said.
Shares of Instacart, formally known as Maplebear, were flat at $58.50 in premarket trading. They had hit a record high of $62 on Monday.
DoorDash shares jumped nearly 7% after the company also reported better-than-expected quarterly revenue. They have declined about 25% so far this year through their last close.
The transaction is expected to close at the end of 2027 or the first half of 2028.
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The deal could face scrutiny over its impact on competition, with New York City’s Department of Consumer and Worker Protection (DCWP) saying on Wednesday that a potential merger continued a “troubling trend” of corporate consolidation.
DoorDash, however, pledged on Thursday that local grocers could continue to work with any delivery platform they choose.
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