DoorDash to acquire grocery delivery firm Instacart in $17B deal
- Transaction values Instacart at $65 per share, representing 26% premium over recent market price
By Gokhan Ergocun
ISTANBUL (AA) - US delivery firm DoorDash has agreed to acquire grocery delivery technology platform Instacart in a cash-and-stock deal valued at approximately $17 billion, the companies announced on Thursday.
Under the definitive agreement unanimously approved by Instacart's board, DoorDash will pay $65 per Instacart share, representing a 26% premium over its closing price on Oct. 22.
The purchase price will be paid with at least 75% cash, with DoorDash stock capped at 25% of the total consideration.
Instacart shareholders may elect to receive all cash, DoorDash shares, or a combination of both, subject to proration.
"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 chief executive of DoorDash.
"Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery," Xu added.
Chris Rogers, chief executive of Instacart, said joining forces with DoorDash allows the company to accelerate innovation and create new opportunities for retail and brand partners.
"When our purpose-built grocery technology and trusted retailer and brand relationships are combined with DoorDash's global consumer reach and logistics capabilities, we can create new opportunities for our retail and brand partners," Rogers said.
Following the acquisition, Instacart customers will gain access to more than 50,000 additional stores beyond the nearly 100,000 retail locations currently on its platform.
The merged company plans to integrate membership programs, allowing DashPass and Instacart+ subscribers to pay a single fee and saving users an estimated $100 million annually.
DoorDash committed to maintaining Instacart's brand, application and enterprise technology products, adding that local grocers will not face platform exclusivity rules.
DoorDash plans to fund the cash portion with cash on hand and proceeds from a 364-day senior unsecured bridge loan facility provided by JPMorgan Chase Bank.
The transaction is expected to close in late 2027 or the first half of 2028, subject to antitrust clearance in the US, regulatory approvals in Canada and Israel, and approval by Instacart stockholders.
Shareholders representing about 19% of Instacart's outstanding stock have agreed to vote in favor of the merger.
Gökhan Ergöçün