DoorDash’s $17 billion agreement to buy Instacart would combine a large delivery network with a grocery platform that has close ties to retailers.
What the deal includes
The agreement values Instacart at $65 per share, a 26% premium to its October 22 closing price, before reports of a possible deal surfaced. At least 75% of the payment will be cash. Instacart shareholders can choose cash, DoorDash stock or a mix, but stock will make up no more than a quarter of the total. Instacart’s board approved the deal unanimously.
Two different strengths
DoorDash began with restaurant orders and expanded into grocery and other local retail. Instacart connects customers with grocers and provides retailers with ordering, fulfillment and advertising tools. DoorDash says it could combine its delivery network with Instacart’s grocery expertise and offer the services through the companies’ apps and store websites. That could be faster than building the same capabilities from scratch.
Why the timing matters
Grocery delivery surged during the pandemic, but the companies now face competition from Amazon and Walmart, which have their own stores, delivery operations and online services. Delivery firms are also seeking growth as the pandemic-era order boom fades and costs rise. Instacart went public in 2023 after its pandemic gains and has since faced pressure to find lasting growth. Buying an established grocery platform would speed DoorDash’s expansion in the category.
A second attempt at a deal
Reuters reported that DoorDash and Instacart explored a deal in 2021, at a reported value of $40 billion to $50 billion. Those talks fell apart partly over concerns about antitrust approval. The current price is much lower than that reported range, though the figures come from different points in the companies’ histories and are not directly comparable.
The contrast may help explain why a sale looks more workable now: Instacart could get a premium over its pre-rumor share price, while DoorDash could buy grocery capabilities at a lower reported valuation than during the pandemic boom. This is an inference, not an explanation given by either board.
Possible gains and risks
DoorDash says customers could get more store choices, savings and faster delivery. Its leaders have also said the businesses will offer one membership fee for DashPass and Instacart+. The companies say Dashers and Instacart Shoppers will have more ways to earn. Retailers could gain a larger delivery network and more online tools, but could also rely more on one powerful partner for customer access, fulfillment and advertising.
A combined company could have more influence over shopper fees, store commissions and advertising costs, as well as terms for delivery workers. These are possible concerns, not established effects. The companies argue that a larger platform could help local retailers compete with Amazon and Walmart.
The regulatory questions
The deal’s central regulatory risk is whether it reduces competition. DoorDash has a strong position in restaurant delivery, and Instacart is a major grocery-delivery intermediary. Regulators’ view may depend on how they define the market: all grocery shopping, including stores and retailers’ own websites, or the narrower business of third-party delivery and technology services.
CNBC reported analysts’ view that third-party platforms handle a minority of grocery purchases overall, while a narrower market definition could make approval harder. The DOJ and FTC’s nonbinding merger guidelines say regulators examine whether a deal removes a significant rival, including on platforms serving multiple groups, and whether it reduces competition for workers. These guidelines do not decide the outcome; they point to questions regulators may consider.
What happens next
The agreement is expected to close near the end of 2027 or in the first half of 2028, subject to Instacart shareholder approval, regulatory clearance and other conditions. The companies say they will operate separately until then, so customers and merchants should not expect immediate changes. The next steps are a shareholder vote and regulatory review.