DoorDash Will Acquire Instacart for About $17 Billion, per CNBC
The two biggest names in American delivery are becoming one company.
DoorDash will acquire Instacart for about $17 billion, in a deal that values the grocery delivery company at $65.00 per share in cash and stock, per CNBC.
The companies announced the definitive agreement on Thursday, confirming days of reporting that a deal was close.
The Terms of the Deal
Instacart shareholders can elect to receive $65.00 in cash per share, 0.3372 shares of DoorDash stock, or a mix of $48.75 in cash plus 0.0843 DoorDash shares.
Because stock is capped at 25% of the total consideration, an oversubscribed stock election will be prorated.
The $65.00 price represents a premium of about 26% to Instacart's closing price on October 22, the last session before media reports of a possible deal surfaced.
Before the takeover talk began, Instacart carried a market value of about $13 billion, against roughly $73 billion for DoorDash.
DoorDash is funding the cash portion with cash on hand and new debt, backed by a bridge commitment from JPMorgan Chase, and says there is no financing condition on the deal.
A Grocery Giant Takes Shape
The acquisition is DoorDash's biggest push yet beyond its restaurant delivery roots.
Instacart runs the dominant US grocery delivery marketplace, connecting shoppers with chains including Kroger and thousands of local grocers.
Instacart will keep its brand, its consumer app, and its enterprise technology products after the deal closes, and it will operate as a separate business until then.
DoorDash says it expects more than $500 million in annual synergies over time, net of investments.
Instacart had also held talks with Uber, but those discussions ended before the DoorDash deal came together, per CNBC.
A Long Road to Closing
Instacart's board approved the deal unanimously, and holders of about 19% of its shares have already agreed to vote in favor.
Closing is not expected until the end of 2027 or the first half of 2028.
The timeline reflects what is ahead: an Instacart stockholder vote, a US antitrust waiting period, and regulatory clearances in Canada and Israel.
That antitrust review is the key risk, since the deal combines the largest restaurant delivery platform with the largest grocery delivery marketplace in the country.
Instacart also remains under regulatory scrutiny of its own, having agreed to a $60 million settlement with the Federal Trade Commission over allegations it misled customers with false advertising and unlawful subscription enrollment practices.
What It Means for Markets
DoorDash shares rose in early trading on the announcement, while Instacart jumped toward the $65.00 takeover price.
With closing a year or more away, Instacart will trade as a merger-arbitrage story, and its spread to the offer price will move with every antitrust headline.
Traders will be watching DASH and CART for flow around the vote and review process, along with rival UBER, which now loses its clearest path to a grocery delivery acquisition of scale.
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