Doordash to buy Instacart in $17bn deal it says will expand customer options
Instacart shoppers will be able to buy from 150,000 stores, compared to the 100,000 currently available on the platform, the firms said.
DoorDash to buy Instacart in $17bn deal it says will expand customer options
DoorDash will acquire grocery delivery company Instacart in a $17bn (£12.8bn) transaction, creating a giant business that will deliver more meals, urgent purchases and large weekly grocery orders straight to customers.
DoorDash said the deal, which is expected to be completed in about a year, will broaden choices for customers and allow more sellers to use the companies’ services.
Instacart shoppers will be able to shop at 150,000 stores, up from 100,000 now, while DoorDash will move beyond restaurants into retail, the companies said.
“Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve,” Instacart’s chief executive said.
“Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more,” CEO Chris Rogers also said.
For DoorDash, the purchase will give it access to Instacart’s grocery selection and substitution expertise, said the company’s co-founder and chief executive, Tony Xu.
“Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts,” Xu said.
He added that “Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day”.
The deal, which is expected to close by the end of 2027 or in the first six months of 2028, is DoorDash’s largest acquisition so far and could help it compete with delivery giants such as Amazon.
Morningstar analyst Martin Szumski told Reuters that the growth opportunity in food delivery was changing.
“Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders: weekly grocery shops, convenience items, and retail,” he said.
Under the agreement, DoorDash will buy Instacart at a value of $65 a share, representing a 26% premium to Instacart stock’s closing price on 22 October — the price before news of the possible merger first surfaced. DoorDash said the deal will be at least 75% cash.
DoorDash plans to retain Instacart’s brand, app and technology products. The delivery services will continue operating as separate companies until the deal is completed.
Reuters also reported that the merger could face antitrust concerns from government regulators.
New York City’s commission on consumer and worker protections, which last month reached a $131.5m settlement with DoorDash over accusations of underpaying workers, said in a statement: “This proposed merger continues a troubling trend of mega-corporations consolidating.”
“Whether or not this merger proceeds, we will fully enforce delivery workers’ rights,” it added.