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DoorDash Strikes $17 Billion Deal to Buy Instacart, Betting Big on Groceries
The cash-and-stock acquisition, announced Thursday, hands DoorDash the grocery-delivery leader it tried and failed to buy five years ago — this time with no Caper Cart smart-cart business attached.
DoorDash said Thursday it has agreed to acquire grocery-delivery rival Instacart in a deal valuing the company at roughly $17 billion, ending months of speculation about the two gig-economy giants joining forces.
Under the terms disclosed in an SEC filing, Instacart (operating under its corporate name Maplebear) shareholders will receive $65 per share, a 26% premium to Instacart's closing price on October 22, the day before reports of advanced talks first surfaced. At least 75% of the consideration will be paid in cash, with shareholders able to elect cash, DoorDash stock, or a mix — though DoorDash stock is capped at 25% of the total deal value. Instacart's board has unanimously approved the agreement.
A deal five years in the making
DoorDash and Instacart held merger talks once before, in 2021, when a combination was reportedly valued at $40 billion to $50 billion. Those talks collapsed amid antitrust concerns under the Biden administration, at a time when Instacart was still a private company. The current deal arrives under a very different regulatory and market backdrop, though it will still require shareholder and regulatory approval before closing.
THE DEAL THEY COULDN'T MAKE WORK IN 2021 IS BACK — AT A LOWER PRICE.
Instacart had also been in separate talks with Uber about a potential tie-up, according to a source cited in reporting on the deal, but those discussions are no longer active. Shares of Instacart jumped roughly 8% on earlier reports of the advanced talks, while DoorDash stock fell about 6%, reflecting investor unease about the price DoorDash is paying to add scale in groceries.
As part of the integration, Instacart plans to wind down its Caper Cart smart shopping-cart unit — the company's bet on AI-equipped carts for grocery stores — by the end of the second quarter of 2027. The company expects $55 million to $80 million in pre-tax charges tied to that shutdown.
If completed, the merger would combine two of the largest players in US on-demand delivery, pairing DoorDash's restaurant and retail logistics network with Instacart's deep grocery-store partnerships. Regulators' scrutiny of the deal, given the companies' history with antitrust concerns, is expected to be a key hurdle in the months ahead.