DoorDash has agreed to buy Instacart in a cash-and-stock deal valuing the grocery delivery company at about $17 billion, the companies announced.
The agreement values Instacart at $65 a share, 26% above its Oct. 22 closing price, before media reports of a possible purchase. Instacart’s board unanimously approved the deal.
The companies expect to complete the transaction in late 2027 or the first half of 2028. DoorDash expects to keep Instacart’s brand, app and technology products for retailers. Until closing, the businesses will operate separately.
For customers who subscribe to both DashPass and Instacart+, DoorDash proposes one membership fee instead of two. The company estimates that would save members $100 million a year in subscription fees alone.
Instacart customers could also gain access to more than 50,000 additional stores, beyond the nearly 100,000 already on the platform, according to DoorDash.
The purchase would combine DoorDash’s delivery network with Instacart’s grocery ordering and fulfillment technology. Retailers could use those services through both apps and their own websites, alongside the companies’ advertising and artificial intelligence tools.
The companies say local grocers need those services to compete with large retailers that can afford their own delivery fleets, warehouses, membership programs and shopping technology.
More grocers could use Instacart’s systems to operate their websites and sell advertising. DoorDash’s DashMart Fulfillment Services could help stores handle additional online orders, according to the announcement.
“Grocery is one of the hardest things to get right online,” said Tony Xu, DoorDash’s co-founder and CEO.
Xu pointed to the work involved in choosing ripe produce, finding substitutes a customer would accept and getting ice cream delivered before it melts.
Instacart CEO Chris Rogers said the company had spent 14 years helping retailers compete and grow. Combining its grocery technology and retailer relationships with DoorDash’s reach and delivery capabilities would allow it to do more, he said.
DoorDash also expects more orders to create additional earning opportunities for delivery workers and Instacart shoppers. The announcement did not estimate how much more they might earn.
As part of its commitments after closing, DoorDash said grocers would remain free to work with any delivery platform.
Instacart shoppers would retain flexibility over how much they work and access to the information they need to choose batches of orders. They could accept DoorDash orders or continue shopping only through Instacart.
At least 75% of the total payment to Instacart shareholders will be cash. For each share, shareholders can elect $65 in cash, 0.3372 DoorDash shares, or $48.75 in cash plus 0.0843 DoorDash shares.
Those choices are subject to allocation rules. DoorDash stock cannot exceed 25% of the total payment. If shareholders request more stock than the cap permits, stock allocations will be reduced proportionately.
DoorDash plans to fund the cash portion with money on hand and borrowing. JPMorgan Chase Bank has committed to provide a 364-day unsecured bridge loan, subject to customary conditions. The acquisition is not contingent on financing.
Shareholders holding about 19% of Instacart’s outstanding shares have agreed to vote for the deal.
Completion still requires Instacart shareholder approval, expiration or termination of the waiting period under U.S. antitrust law, regulatory approvals including in Canada and Israel, and other customary closing conditions.
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