DoorDash has announced a $17 billion deal to acquire grocery delivery platform Instacart, bringing together two major players in online delivery as competition intensifies with Walmart and Amazon.
The agreement, could substantially expand shopping options for customers while giving local retailers access to a broader delivery network.
Under the agreement, DoorDash will pay $65 per Instacart share, representing a 26% premium to the company’s closing share price on October 22. The transaction values Instacart’s equity at approximately $17 billion, with at least 75% of the total consideration to be paid in cash. Instacart shareholders can choose to receive cash, DoorDash shares, or a combination of both.
One of the biggest changes for consumers could be access to a significantly wider selection of stores. Instacart customers would potentially be able to shop from more than 50,000 additional locations, beyond the nearly 100,000 stores already available on its platform.
The acquisition would combine DoorDash’s delivery infrastructure with Instacart’s grocery ordering and fulfillment technology. Retailers would be able to use these services through the companies’ applications and their own websites, alongside advertising and artificial intelligence tools developed by both businesses.
DoorDash also expects the combination to create additional earning opportunities for delivery workers and offer consumers more shopping choices. The companies have outlined plans to provide customers with access to two memberships for the price of one.
Such an agreement would give these smaller grocery stores some more means of handling their online orders and contacting their customers without forcing them to use only one service. According to DoorDash, local retailers will continue to be able to partner with their competitors.
The deal comes as Walmart and Amazon continue expanding their presence in online grocery delivery, particularly in faster delivery services. Estimates from investment firm Wedbush put Walmart’s share of the online grocery market at approximately 30.9%, compared with Amazon’s 23.6%.
Ahead of the announcement, Wedbush analyst Ygal Arounian suggested that combining DoorDash’s restaurant delivery operations with Instacart’s grocery marketplace could strengthen their competitive position against the two retail giants.
DoorDash co-founder and CEO Tony Xu highlighted the challenges of grocery delivery and the complementary strengths of the businesses.
“Grocery is one of the hardest things to get right online,” Xu said in a statement.
He added that Instacart’s experience serving grocers, combined with DoorDash’s delivery technology and network, could help retailers of different sizes strengthen their online operations.
The transaction has received unanimous approval from Instacart’s board of directors. DoorDash intends to finance the cash portion through existing cash reserves and debt financing while maintaining an investment-grade capital structure. The deal is not subject to a financing condition.
The companies expect the acquisition to close toward the end of 2027 or during the first half of 2028, subject to Instacart shareholder approval and regulatory clearance.
Until those approvals are secured, the companies will remain separate. If completed, the acquisition would bring DoorDash’s restaurant-focused delivery network and Instacart’s established grocery platform under one owner, creating a larger competitor in the market for local shopping and delivery services.
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