DoorDash Offers $17 Billion to Acquire Instacart at a 26% Premium per Share
Key Facts
DoorDash and Instacart announced a proposed definitive agreement on October 29 under which DoorDash would acquire Instacart in a deal with an equity value of about $17 billion. The agreement sets consideration at $65 per Instacart share, a 26% premium to the closing share price on October 22, the last trading session before media reports about a possible deal. The transaction would give DoorDash a broader presence in grocery delivery alongside its restaurant-delivery business. DoorDash said combining its scale and logistics technology with Instacart’s software could increase the density of its grocery-store network. It added that this could help speed deliveries, lower fulfillment costs and expand earning opportunities for shoppers.
The agreement provides for at least 75% of the total consideration to be paid in cash, with Instacart shareholders able to choose cash, DoorDash shares or a mix of both. The stock option is subject to proration to ensure shares do not exceed 25% of the total consideration. DoorDash said the deal is not contingent on financing and that it is targeting a capital structure that preserves its investment-grade ratings. The company forecast a multiyear path to annual savings of $500 million or more after investments. It said, however, that it would invest more than the total savings in the first year after closing, with positive net savings expected in the second year and beyond. These figures are company forecasts under its plan to combine the businesses, not savings already achieved.
The deal brings together two networks that differ in scale and the type of demand they serve. According to DoorDash, Instacart works with more than 2,200 retail banners representing about 100,000 stores. DoorDash completed more than 3 billion orders last year, compared with 338 million orders handled by Instacart, according to an Associated Press report. Consumer Edge data cited by the news agency also showed a shift in U.S. delivery-platform spending shares over five years. Instacart’s share fell from 26% to 18%, while DoorDash’s rose from 44% to 59%. The shift comes as the deal seeks to combine DoorDash’s broader network with Instacart’s grocery-focused platform.
The announcement coincided with quarterly results showing growth at both companies. DoorDash said total orders rose 17% year over year in the third quarter of 2026, excluding the impact of its Deliveroo acquisition. Net income attributable to common shareholders was $466 million, compared with $244 million in the third quarter of 2025 and $200 million in the second quarter of 2026. Instacart, meanwhile, posted year-over-year growth of 15% in gross transaction value and 17% in revenue in the third quarter. Net income was $147 million, while adjusted earnings before interest, taxes, depreciation and amortization rose 23% to $342 million. The results provided a snapshot of the businesses’ performance before the deal announcement, while the stated merger savings are based on DoorDash’s forward-looking projections.
An analyst quoted by the Associated Press warned that a merger could reduce competition and weaken grocery retailers’ bargaining options. The analyst said the two companies are, in many markets, two of the three largest buyers of shopper labor. That concern puts the deal’s potential effects on stores and workers among the issues that may draw regulatory attention. The agreement remains subject to approval by Instacart shareholders and regulatory approvals in the United States, Canada and Israel. DoorDash said shareholders holding about 19% of Instacart’s outstanding shares had agreed to vote in favor of the deal. The company expects it to close in late 2027 or during the first half of 2028, if the required approvals are secured.
Trading in both shares reflected the announcement on Thursday afternoon, October 29, with DoorDash shares rising about 5% and Instacart shares falling 1.6%, according to the Associated Press. DoorDash shares, listed under the ticker DASH, closed at $179 that day, according to EL7 data. Looking ahead to upcoming disclosures, Instacart canceled its earnings call scheduled for November 5, 2026. It also suspended its financial guidance during the deal period and withdrew its previous long-term guidance. The company said the guidance suspension applies while the agreement is in effect. The expected closing date therefore remains dependent on the shareholder and regulatory approval process before the companies move into integration.