Key takeaways
- DoorDash agreed on October 29 to buy Instacart for $65 a share, about $17 billion in equity value.
- At least 75% of the price is cash, and holders can choose cash, DoorDash stock or a mix.
- DoorDash expects the deal to close at the end of 2027 or in the first half of 2028, pending antitrust and other approvals.
The DoorDash Instacart acquisition is a deal worth about $17 billion, DoorDash announced on October 29. DoorDash will pay $65 per Instacart share, a 26% premium to the October 22 close, the last trading day before media reports of a possible deal.
It joins the two biggest grocery delivery apps in the US. Instacart's grocery technology reaches nearly 100,000 stores, and DoorDash says its own network would add more than 50,000.
What shareholders get
At least 75% of the price is cash. Instacart holders can choose one of three options for each share:
| Option | Per Instacart share |
|---|---|
| All cash | $65.00 |
| All stock | 0.3372 DoorDash shares |
| Mix | $48.75 in cash plus 0.0843 DoorDash shares |
DoorDash stock can make up no more than 25% of the total, so stock elections are prorated if too many holders pick them. DoorDash will fund the cash with cash on hand and debt. JPMorgan has committed to a 364-day bridge loan, a short-term loan that is later replaced with longer-term debt, and the deal has no financing condition.
What DoorDash says it will do
DoorDash expects to keep the Instacart brand and app. It also promises to keep the platform open, so local grocers can work with any delivery company. Shoppers will keep control over how much they work and whether they take DoorDash orders.
Members of DashPass and Instacart+ would pay one membership fee instead of two, which DoorDash estimates saves them $100 million a year in total. Tony Xu, DoorDash's co-founder and CEO, said "Grocery is one of the hardest things to get right online."
Timing and what could stop it
DoorDash expects the deal to close at the end of 2027 or in the first half of 2028. That is a long wait, and it points to a regulatory review. The deal needs Instacart stockholder approval, the end of the US Hart-Scott-Rodino antitrust waiting period and other approvals, including in Canada and Israel. Holders of about 19% of Instacart's shares have agreed to vote in favor. Instacart's board approved the deal unanimously.
DoorDash said it would discuss the deal on its third-quarter earnings call on October 29 at 5:30 a.m. PT, when it also reports quarterly results.
Sources
- DoorDash to Acquire InstacartDoorDash
