DoorDash to Acquire Instacart for $17 Billion at 26% Share Premium
Key Facts
DoorDash and Instacart announced a definitive agreement on October 29 under which DoorDash will acquire its rival in an all-stock transaction valued at about $17 billion. The agreement sets consideration at $65 per Instacart share, with cash making up at least 75% of the total deal value. DoorDash said the price represents a 26% premium to Instacart’s closing share price on October 22, the last session before media reports about a possible deal. The agreement gives Instacart shareholders the option to receive cash, DoorDash shares or a mix of the two, with the stock component capped at 25% of total consideration. The announcement follows EL7’s report on October 26 that advanced talks were underway to value Instacart at about $17 billion. The agreement now sets a defined framework for a deal that had been under discussion, though its completion remains subject to shareholder and regulatory approvals.
DoorDash presented the deal as combining its delivery network with Instacart’s grocery and order-fulfillment technology, saying the combined group will offer these services to retailers through both apps and the retailers’ own websites. The package also includes advertising and artificial intelligence tools, the company said. DoorDash said Instacart customers may be able to shop at more than 50,000 additional stores, in addition to about 100,000 stores already on the platform. The company also expects DashPass and Instacart+ members to pay one fee instead of two, saving consumers $100 million a year in membership fees alone. DoorDash also says the deal could enable at least $500 million in annual net savings over several years, but expects to invest more than the value of those savings in the first year after closing. The company is presenting expanded store access and lower membership fees as part of its business case for the deal.
In New York, Mayor Zohran Mamdani objected to the effects of corporate concentration on consumers and workers. In a statement cited by Axios, he wrote that “corporate concentration means higher prices, greater exploitation and more economic inequality for New Yorkers.” The city issued a separate statement on October 28 through the commissioner of the Department of Consumer and Worker Protection, saying the proposed merger continues “a troubling trend of consolidation by large corporations.” The commissioner pledged to enforce delivery workers’ rights. The city administration’s position comes amid an earlier dispute between Mamdani and DoorDash over worker rights; the mayor’s office said a settlement announced in September covered more than 260,000 workers, with more than $115 million going directly to them. That record puts delivery workers’ rights at the center of local opposition to a deal combining two major shopping and delivery services companies.
The deal also faces possible scrutiny from the U.S. Federal Trade Commission, which has focused on affordability and reviewed delivery-app practices, Reuters reported. Market-share data cited by Reuters from a YipitData analysis showed DoorDash accounted for 65.1% of orders covered in 2025, compared with 9.1% for Instacart; the analysis covered email receipts from about 3 million consumers. The day before the deal was announced, the commission launched a study into how companies including DoorDash and Instacart use shopper data to set prices and driver pay. The review adds to the regulatory approval process involving the United States, Canada and Israel, as well as a vote by Instacart shareholders. DoorDash said shareholders holding about 19% of Instacart’s outstanding shares had agreed to vote in favor of the deal. The companies expect to complete the transaction at the end of 2027 or during the first half of 2028, subject to obtaining the necessary approvals.
The announcement coincided with the companies’ third-quarter results, but Instacart canceled its earnings call scheduled for November 5 and withdrew its financial guidance during the deal period. Instacart said gross transaction value rose 15% year over year in the quarter, while revenue increased 17%. DoorDash reported annual revenue growth of 34% and total order growth of 28%, while net income attributable to shareholders rose to $466 million. In Thursday afternoon trading on October 29, DoorDash shares rose about 5%, while Instacart shares fell 1.6%, according to the Associated Press. DoorDash shares had closed at $169.49 on October 28, according to EL7 data. The next steps are a vote by Instacart shareholders and regulatory reviews ahead of the expected closing at the end of 2027 or in the first half of 2028.