DoorDash has announced plans to acquire Instacart in a deal valued at approximately $17 billion, strengthening its position in the rapidly growing US grocery delivery market. The agreement offers Instacart shareholders $65 per share, representing a premium of around 26% over the closing price on October 22. At least 75% of the consideration will be paid in cash, with shareholders also having the option to receive DoorDash stock or a combination of cash and shares.
The acquisition comes amid intensifying competition in the food and grocery delivery industry, where companies are diversifying into convenience and retail services as growth in their core food-delivery businesses matures. Rising operational costs, regulatory scrutiny over gig workers’ treatment and a slowdown in orders from pandemic-era peaks have accelerated industry consolidation. DoorDash CEO Tony Xu highlighted Instacart’s years of experience in online grocery delivery, a segment gaining traction as consumers increasingly prioritise convenience.
The transaction is expected to close by the end of 2027 or during the first half of 2028, subject to necessary approvals. However, the deal could face regulatory scrutiny over its potential impact on competition, with New York City’s Department of Consumer and Worker Protection expressing concerns about growing corporate consolidation. DoorDash has stated that local grocery retailers will remain free to partner with any delivery platform of their choice.
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