DoorDash to buy Instacart for $17 billion, shares move opposite ways
DoorDash agreed to acquire grocery delivery platform Instacart in a deal worth $17 billion, sending DoorDash shares up more than 5% while Instacart stock dipped 1.5%.
Under the terms of the agreement, DoorDash will pay $65 per Instacart share, a 26% premium to Instacart’s closing price on October 22. The structure allows for 75% of the consideration in cash, with Instacart shareholders able to choose cash, DoorDash stock, or a mix of both. Instacart’s board has unanimously approved the transaction.
DoorDash CEO Tony Xu said pairing Instacart’s grocery expertise with DoorDash’s delivery network and technology could expand what stores of all sizes can offer through grocery delivery.
The deal arrives as Walmart and Amazon continue to gain ground in online grocery, particularly in same-day and one-hour delivery. Wedbush estimates Walmart holds about 30.9% of the online grocery market, with Amazon close behind at roughly 23.6%. Wedbush analyst Ygal Arounian had noted before the announcement that combining DoorDash’s restaurant delivery business with Instacart’s grocery marketplace could help the companies compete more effectively against those two rivals.
DoorDash said the merger would let Instacart shoppers access more than 50,000 additional stores on top of the roughly 100,000 already on its platform, and that customers would effectively get two memberships for the price of one. The company also said local merchants would gain additional ways to generate revenue through the combined platform.
The deal matters for markets because it reshapes competitive dynamics in US online retail and delivery, a sector increasingly contested by Walmart and Amazon. Stock-specific moves in DoorDash and Instacart reflect how investors are weighing the premium paid, the financing mix, and the strategic logic of combining restaurant and grocery delivery networks.
Source: Yahoo Finance