DoorDash Agrees to Buy Instacart for $17 Billion at a 26% Premium
Key Facts
DoorDash and Instacart announced a proposed definitive agreement on October 29 under which DoorDash would buy its rival for $65 per share, valuing its equity at about $17 billion. Instacart’s board unanimously approved the agreement, but the announcement does not mean the deal is complete: it still requires approval from the company’s shareholders and regulatory clearances. The offer price is 26% above Instacart’s October 22 close, the last session before media reports about a possible deal. DoorDash said the aim is to help local merchants reach more customers. The deal is also subject to customary closing conditions.
The agreement provides for at least 75% of the total consideration to be paid in cash, while Instacart shareholders may choose cash, DoorDash shares or a combination of the two. The allocation is subject to a proration mechanism that ensures DoorDash shares do not exceed 25% of the total consideration. DoorDash said it will fund the cash portion with available liquidity and debt financing, and has secured a commitment for a 364-day unsecured bridge loan facility. It added that the deal is not contingent on obtaining financing. In certain cases involving a failure to secure regulatory approvals or a final legal bar related to antitrust, DoorDash may pay Instacart a termination fee of $1.25 billion; Instacart may pay DoorDash $650 million in specified circumstances, including accepting a competing offer.
DoorDash presents the combination of its delivery network and Instacart’s grocery technology and fulfillment capabilities as the basis for expanding the service. It said Instacart customers could, after the deal closes, shop at more than 50,000 additional stores, on top of about 100,000 currently available on its platform. The company also expects annual savings of about $100 million for DashPass and Instacart+ members through a single membership fee. These figures are company estimates tied to the post-merger period. The offer positions Instacart’s grocery technology alongside DoorDash’s network as two pillars for expanding among local merchants.
The deal comes as DoorDash reported strong growth in the third quarter of 2026: orders rose 28% year over year to 993 million, and marketplace transaction volume increased 36% to $33.9 billion. Revenue grew 34% to $4.6 billion, while net income attributable to common shareholders climbed 91% to $466 million. But the company said growth was slower excluding the impact of its acquisition of Deliveroo: 17% for orders and 23% for both marketplace transaction volume and revenue. This detail distinguishes underlying business growth from the contribution added by Deliveroo. The results show DoorDash entering the deal with a growing business base, with its prior acquisition contributing to reported growth rates.
Instacart, meanwhile, reported gross transaction value of $10.528 billion in the same quarter, up 15% year over year, and revenue of $1.095 billion, up 17%. Net income under generally accepted accounting principles rose 2% to $147 million. Adjusted earnings before interest, taxes, depreciation and amortization were $342 million, up 23% year over year. Advertising and other revenue increased 23% to $331 million, while orders rose 10% to 91.4 million. The results show revenue growth outpacing net income growth, while advertising revenue expanded faster than orders.
The deal could face scrutiny over its impact on competition, particularly given the companies’ overlap in grocery delivery. The Associated Press said reduced competition could raise prices for consumers and limit grocery stores’ bargaining options, while Reuters quoted an e-commerce analyst saying the overlap makes antitrust scrutiny likely. According to YipitData figures cited by Reuters, DoorDash accounted for 65.1% of covered orders in 2025, compared with 25.8% for Uber Eats and 9.1% for Instacart; the categories include restaurant, grocery and retail delivery, not grocery alone. The analysis was based on email receipts from more than 3 million consumers. The Associated Press also reported that Instacart supplies online storefront technology to many grocery stores, and that an antitrust lawyer warned the company could use this control to exclude competitors or monitor prices and discounts.
In afternoon trading on October 29, DoorDash shares rose 5% and Instacart shares fell 1.6%. Former Instacart founder Apoorva Mehta said the idea of combining the companies had been discussed for years. As part of the regulatory review, the Federal Trade Commission on Wednesday launched a study into how companies including DoorDash and Instacart use personal data to set prices and driver pay, an issue that could be added to the deal review. Instacart disclosed that it canceled an earnings call scheduled for November 5, suspended its financial guidance and withdrew its long-term guidance because of the agreement. DoorDash is targeting a close at the end of 2027 or in the first half of 2028, subject to approval from Instacart shareholders and regulators in the United States, Canada and Israel. DoorDash said shareholders holding about 19% of Instacart’s outstanding shares have pledged to vote in favor of the deal.