DoorDash will acquire Instacart for $17 billion, a deal that pushes the food-delivery company deeper into online grocery. DoorDash shares rose in premarket trading, while analysts flagged possible antitrust scrutiny.
DoorDash will acquire Instacart for $17 billion, the companies announced Thursday. Shares of DoorDash jumped more than 8% in premarket trading after the news, while Instacart traded near the flatline.
Deal terms and timeline
The deal values Instacart at $65.00 per share, a 26% premium over its October 22 close, and will be at least 75% cash. Business Insider reports the transaction is expected to close at the end of 2027 or in the first half of 2028.
In a joint announcement, the companies said that Instacart customers could shop at more than 50,000 additional stores. DashPass and Instacart+ members would pay one membership fee instead of two.
A bigger grocery footprint
Acquiring Instacart would give DoorDash a bigger presence in online grocery delivery. DoorDash started in food delivery and has since added retailers such as Sephora, Macy's, Staples and Anthropologie, plus a growing group of regional grocers.
Instacart, however, has faced increasingly stiff competition from Amazon and Walmart. Both have pushed further into same- and next-day delivery, which poses a threat to its on-demand model.
Antitrust questions
Speculation had swirled since last week, when The Information reported that Instacart was exploring a sale. On Monday, several outlets reported that DoorDash was in advanced discussions and that the deal could value Instacart at about $17 billion.
Analysts have noted that a combination could attract antitrust scrutiny given the companies' market overlap. Wedbush analysts wrote that slicing the online market more narrowly, or from the perspective of grocers as enterprise customers, can make approvals more challenging.
Sources: CNBC, Business Insider
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