DoorDash to buy Instacart for $17 billion in the delivery industry’s biggest consolidation, the companies announced on October 29, in a cash-and-stock deal that pairs the restaurant delivery leader with the largest US grocery delivery platform. The agreement values Instacart at $65 per share, a 26 percent premium to its October 22 closing price.
The transaction is expected to close at the end of 2027 or in the first half of 2028, subject to shareholder and regulatory approval, according to Retail Dive and Securities.io coverage of the announcement. At least 75 percent of the consideration will be paid in cash, with DoorDash stock capped at 25 percent.
What each side brings
DoorDash said it expects to retain Instacart’s brand, enterprise technology products and app, and the companies will continue to operate separately until closing. Instacart’s board unanimously approved the agreement, and shareholders holding about 19 percent of its stock have agreed to vote in favour.
Instacart chief executive Chris Rogers said the deal would combine grocery technology and retailer relationships with DoorDash’s consumer reach, giving customers access to more than 50,000 additional stores beyond the nearly 100,000 already on Instacart’s platform. DoorDash chief executive Tony Xu framed the move as an expansion of local commerce.
The regulatory road ahead
The deal faces antitrust scrutiny because it combines the dominant restaurant delivery network with the leading grocery delivery service. DoorDash has agreed to fund the cash portion through cash on hand and debt financing, including a 364-day bridge facility from JPMorgan Chase, according to the filing summary.
Termination fees are substantial: Instacart would pay $650 million if it walks away, while DoorDash would owe $1.25 billion under certain circumstances. The long closing timetable reflects the approvals required in the US, Canada and Israel.
Shoppers and workers are unlikely to notice any change soon, since the companies will operate separately for more than a year. The longer question is whether regulators view the combination as a convenience for consumers or as a concentration of power in local delivery, and that judgment will shape the deal’s fate.
