DoorDash Instacart Deal: What the $17B Merger Means

The deal in brief

DoorDash has agreed to acquire Instacart for about $17 billion. The deal combines the largest U.S. restaurant delivery platform with the country's biggest online grocery service 13. Instacart shareholders will receive $65 per share in a mix of cash and stock 4. DoorDash says at least 75% of the consideration will be cash 5. Both boards have approved the agreement 13. The companies expect it to close at the end of 2027 or in the first half of 2028, pending a vote by Instacart stockholders and regulatory clearance 611. It is DoorDash's largest acquisition to date 11.

The size of the premium depends on the reference point. Measured against Instacart's close on October 22, the last trading day before reports of a sale, the offer is about 26% higher 17. Against Wednesday's close, the day before the announcement, it is roughly 11% 4. That gap shows how much of the premium the market had already priced in after The Wall Street Journal reported advanced talks. The Journal said the deal could value Instacart at about $17 billion, compared with a pre-report market value of roughly $12 billion 12. DoorDash shares fell 5% on the day that report came out 12.

Accounts of the stock reaction on announcement day differ a little. One report had DoorDash up more than 7% and Instacart up nearly 5% in premarket trading 1. Another put DoorDash up more than 6% in morning trading, with Instacart roughly flat 4. The difference probably reflects when each snapshot was taken. Either way, investors appeared to reward the buyer once terms were public.

What changes for customers, shoppers and grocers

DoorDash plans to keep Instacart's brand, app and enterprise technology products 34. The two will run as separate apps while sharing delivery infrastructure and technology 6. The promised consumer benefits include:

• More stores: Instacart users gain access to more than 50,000 additional stores, on top of the nearly 100,000 already on Instacart 8.
• One subscription: a single fee would cover both DashPass and Instacart+ benefits 67.
• Faster delivery and savings when shopping locally 78.

Instacart's roughly 600,000 shoppers, who are independent contractors, are expected to keep working on the platform 9. Grocers can choose to partner with Instacart, DoorDash, or both 5. The combined company will offer retailers DoorDash's delivery network alongside Instacart's grocery and fulfillment software, including on stores' own websites, plus both companies' advertising and AI tools 7.

The merger could also unsettle perks tied to the two services. Some Chase credit cards carry DashPass benefits, others carry Instacart+ benefits, and some carry both. Those arrangements may change after the merger 6.

Why DoorDash wants grocery

The two companies' latest results show what each side brings. DoorDash reported 993 million orders in the third quarter, worth $33.9 billion 10. The New York Times cited a figure of 970 million orders for its most recent quarter 1. Instacart handled 91.4 million orders worth $10.5 billion 10. Instacart processes about a tenth as many orders but roughly a third of the dollar volume, so its average basket is far larger 10.

That is the strategic logic. Morningstar's Martin Szumski said restaurant delivery is maturing, and that growth now lies in frequent, higher-value orders such as weekly grocery shops, convenience items and retail 11. DoorDash CEO Tony Xu described the fit this way: Instacart has spent years learning grocery selection and substitutions, while DoorDash has built the logistics network 811. Instacart CEO Chris Rogers said the combination pairs Instacart's retailer relationships with DoorDash's global reach 3. Both companies present the merger as a way to compete with Amazon 211.

For Instacart, the sale also caps a difficult stretch. The company has faced slowing growth since its 2023 IPO, under pressure from DoorDash, Uber and Amazon 12. The two companies reportedly held talks in 2021, when Instacart was valued at around $40 billion 12. The $17 billion price is well below that figure.

The antitrust question

The long timeline to closing is the main caveat. Analysts expected significant antitrust scrutiny from the moment the talks leaked, because the businesses overlap 12. The combined company would handle a large share of both takeout and grocery deliveries in the U.S. 1. Regulators may question whether a single membership spanning both categories, and shared delivery infrastructure, will strengthen DoorDash's position against smaller rivals and restaurants.

BTIG analysts had argued that either DoorDash or Uber could make a strategic case for Instacart, but that DoorDash was better placed to win a bidding war 12. That assessment held. Our reading is that the strategy is sound: DoorDash is buying grocery expertise and larger orders at a much lower price than in 2021. The open question is regulatory. Approval is far from assured, and the closing window stretches into 2028.