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DoorDash is set to acquire grocery delivery company Instacart in a $17 billion deal that could reshape the online delivery industry by bringing restaurant meals, household essentials and weekly grocery shopping under a broader commercial umbrella.
The proposed acquisition would represent DoorDash's largest purchase to date and expand its reach beyond restaurant deliveries into the competitive grocery and retail markets. The companies expect the transaction to be completed by the end of 2027 or during the first six months of 2028, subject to the necessary approvals.
Under the agreement, DoorDash will acquire Instacart at $65 per share, representing a 26 percent premium over Instacart's closing share price on October 22, before reports of the potential merger emerged. At least 75 percent of the transaction will be paid in cash.
Both companies said the agreement would increase customer choice while allowing more businesses to access their delivery networks. Instacart customers could eventually shop from approximately 150,000 stores, up from the current 100,000, while DoorDash would gain access to Instacart's established grocery technology and retail relationships.
Instacart chief executive Chris Rogers said the company had spent 14 years helping retailers of different sizes compete and grow through online grocery shopping. He described the proposed combination as an opportunity to improve the affordability and convenience of grocery delivery.
DoorDash co founder and chief executive Tony Xu highlighted the complexity of delivering fresh food. Selecting ripe produce, identifying suitable substitutes and ensuring frozen products arrive before melting require specialised knowledge, he explained.
Xu said Instacart had developed expertise in grocery fulfilment, while DoorDash had built a delivery network and technology that local businesses rely on daily. Combining those strengths could help both companies improve their services.
DoorDash intends to retain Instacart's brand, application and technology products. The companies will continue operating independently until the transaction is completed.
The merger could also attract regulatory scrutiny over competition and market consolidation. New York City's Commission on Consumer and Worker Protection criticised the proposal, describing it as part of a concerning trend towards powerful corporations combining their operations.
The commission previously reached a $131.5 million settlement with DoorDash over allegations involving worker underpayment. It said it would continue enforcing delivery workers' rights regardless of whether the merger proceeds.
Morningstar analyst Martin Szumski said growth in the delivery sector was increasingly shifting towards frequent, higher value purchases, including groceries and household essentials, as restaurant delivery matured.
The proposed acquisition could strengthen DoorDash's ability to compete with major players such as Amazon. However, regulatory approval and the challenges of combining two large platforms remain important hurdles before the deal can become reality.
