DoorDash agrees $17bn deal to buy Instacart

DoorDash has agreed to buy grocery-delivery company Instacart for $17bn (£12.8bn), in a deal the companies say will broaden what customers can order and where they can shop.

The transaction would give Instacart customers access to 150,000 stores, up from 100,000, while extending DoorDash’s reach beyond restaurants into grocery and other retail. The companies say their services will continue to operate independently until the deal closes.

DoorDash values the offer at $65 a share, a 26% premium on Instacart’s closing share price on 22 October, before news of a possible merger emerged. At least 75% of the consideration will be cash, DoorDash said.

The deal is expected to close by the end of 2027 or in the first half of 2028, subject to regulatory approval. The BBC reports that the merger may raise antitrust concerns.

DoorDash says it plans to retain Instacart’s brand, app and technology products. Chief executive Tony Xu said the acquisition would give DoorDash access to Instacart’s grocery selection and expertise in finding substitutes for items that are unavailable.

The acquisition would be DoorDash’s largest to date and could strengthen its position against delivery rivals such as Amazon. Morningstar analyst Martin Szumski told Reuters that growth in food delivery was shifting towards more frequent, higher-value orders, including weekly grocery shops and convenience items.

The proposed merger has also drawn criticism from New York City’s Commission on Consumer and Worker Protection. The commission said it was concerned about the consolidation of large companies and added that it would continue enforcing delivery workers’ rights. Last month, the city reached a $131.5m settlement with DoorDash over allegations of underpaying workers.