DoorDash strikes deal to buy Instacart for about US$17 billion
DoorDash plans to preserve Instacart’s app and brand, while combining subscription payments could save members around US$100 million annually.
DoorDash would expand its grocery delivery operations under an agreement to purchase Instacart for about US$17 billion. The companies announced the cash-and-stock transaction, which still needs shareholder and regulatory clearance.
For each Instacart share, investors may select US$65 in cash, 0.3372 DoorDash shares or a mixture of those options. The price carries a 26% premium over Instacart’s closing share price on 22 October, before negotiations were reported publicly.
The cash portion will cover at least 75% of the price. DoorDash will draw on its cash holdings and borrow additional funds; JPMorgan has committed to a short-term bridge loan.
DoorDash intends to preserve Instacart’s brand, app and supermarket software operations. Instacart customers would gain access through DoorDash to an additional network of more than 50,000 stores.
The proposed subscription changes would let DashPass and Instacart+ members make one payment instead of paying separately for each service. DoorDash puts the potential annual savings for members at around US$100 million.
Closing is expected in late 2027 or during the first half of 2028. Competition authorities in Canada, Israel and the US must approve the transaction, as must Instacart shareholders. Investors holding around 19% of Instacart’s shares have pledged their support.
In its quarterly results, Instacart reported US$1.1 billion in revenue, a 17% year-on-year increase. Platform order value reached US$10.5 billion, up 15%, while net income totaled US$147 million. Instacart also dropped its financial guidance and canceled the earnings call because the acquisition is pending.
