DoorDash Acquires Instacart for $17 Billion in Major Delivery Deal
Translated & summarized from Globes by baba
DoorDash is acquiring grocery delivery company Instacart for $17 billion in a cash and stock deal. The acquisition aims to combine DoorDash's delivery network with Instacart's grocery expertise to enhance online grocery shopping. The deal, which includes a premium on Instacart's stock price, is expected to close by late 2027 or early 2028, subject to regulatory and shareholder approvals.
The story in 5 lines · by baba
- DoorDash will acquire Instacart for $17 billion in a cash and stock transaction.
- The deal offers Instacart shareholders a premium of 11.3% over its recent Nasdaq closing price.
- Instacart's market valuation is approximately $13.9 billion, while DoorDash's is $73.4 billion.
- The acquisition is expected to close by late 2027 or the first half of 2028.
- Regulatory approvals are required, including from authorities in Canada and Israel.
DoorDash has announced a significant acquisition, agreeing to purchase grocery delivery company Instacart for $17 billion. The deal will be a mix of cash and stock, with Instacart shareholders having the option to receive up to 25% of the total consideration in stock. The acquisition values Instacart shares at $65 each, representing a premium of 11.3% over its last closing price on the Nasdaq and 26% above its price from the previous week, before the potential deal was reported.
Instacart, which went public three years ago, has seen its stock price increase by nearly 95% since its IPO, with its current market valuation around $13.9 billion. DoorDash, headquartered in San Francisco and founded in 2013, has facilitated over $10 billion in orders through its platform. The company operates in 40 countries under various brands, including Wolt, which it acquired in 2022 for approximately $8.1 billion.
Both companies highlighted the growing trend of online grocery shopping and the expectation for fast, affordable delivery. While large chains are building their own logistics, smaller stores struggle to compete. DoorDash and Instacart aim to bridge this gap. Tony Xu, DoorDash's co-founder and CEO, stated that the combined entity can offer better tools for businesses of all sizes to leverage grocery delivery, emphasizing the challenge of selecting fresh produce and delivering perishables like ice cream before they melt.
Chris Rogers, Instacart's CEO, noted that the company has transformed online grocery shopping over the past 14 years and believes the sale to DoorDash will enable further innovation and value creation for customers, sellers, and shareholders. DoorDash plans to finance the stock portion of the deal through debt, with a bridge loan commitment already secured from J.P. Morgan, aiming to maintain an investment-grade rating.
The transaction is expected to close by late 2027 or the first half of 2028, pending approval from Instacart shareholders and regulatory bodies in countries including Canada and Israel. Approximately 19% of Instacart's shareholders have already indicated their support for the deal.
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