DoorDash to Acquire Instacart in $17 Billion Deal
DoorDash announced a $17 billion acquisition of Instacart, creating a larger grocery-delivery platform amid intensifying competition.
DoorDash disclosed Thursday that it will acquire Instacart for approximately $17 billion in a transaction that combines cash and stock, valuing Instacart at $65 per share, about a 25% premium to its closing price on Oct. 22. The merger ends Instacart’s status as an independent public company, which it became in 2023 after a pandemic-driven surge in grocery-delivery demand.
The combined entity aims to strengthen competition against rivals such as Amazon, Walmart, and Uber, which have expanded their own same-day and rapid-delivery grocery services. DoorDash said the partnership will provide “grocers and retailers of every size DoorDash’s delivery network and Instacart’s grocery and fulfillment technology.”
“Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts,” said Tony Xu, co-founder and CEO of DoorDash.
“Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day. Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery,” Xu added.
DoorDash highlighted that customers could avoid maintaining separate subscription services, potentially saving an estimated $100 million annually in membership fees. However, the American Economic Liberties Project, an anti-monopoly advocacy group, has urged regulators to block the merger, arguing it would give the combined firm control of nearly 60% of the third-party grocery-delivery market.
“Instacart and DoorDash have spent the better part of a decade bullying main-street businesses and denying fair pay and benefits to their combined 9 million workers,” said Lee Hepner, senior legal counsel at the AELP. “This merger represents the next frontier of data-driven abuse, exploiting massive asymmetries of power to squeeze worker compensation on the way in and drain consumer wallets on the way out.”