DoorDash Acquires Instacart for $17 Billion, Dominating Grocery Delivery
Translated & summarized from 0404 by baba
DoorDash is acquiring U.S. grocery delivery app Instacart for approximately $17 billion, a deal approved by Instacart's board. The merger aims to combine DoorDash's rapid delivery network with Instacart's grocery picking and delivery technology. The transaction, which includes a 26% share premium, is expected to close by late 2027 or early 2028, pending regulatory and shareholder approvals in multiple countries, including Israel. Both companies will operate separately until then.
The story in 6 lines · by baba
- DoorDash is acquiring Instacart for approximately $17 billion, a deal approved by Instacart's board.
- The acquisition aims to merge DoorDash's delivery network with Instacart's grocery picking and delivery technology.
- The deal offers a 26% premium on Instacart's stock price, with payment in cash and DoorDash shares.
- The transaction is expected to conclude by late 2027 or early 2028, pending regulatory approvals.
- Subscribers to both services are projected to save about $100 million annually through a consolidated subscription.
- DoorDash, which operates Wolt in Israel, will require approval under Israeli competition law.
DoorDash, the parent company of the delivery app Wolt, announced on Thursday its acquisition of Instacart, a leading U.S. grocery delivery platform, in a deal valued at approximately $17 billion. DoorDash will pay $65 per share of Instacart, a 26% premium over its closing price on October 22, the last trading day before initial reports of negotiations emerged. Instacart's board of directors unanimously approved the transaction.
Previously, each company specialized in different delivery sectors: Instacart was the go-to for American families for large grocery shopping, while DoorDash focused on delivering meals and neighborhood goods within an hour. The merger will enable supermarkets and stores to leverage both DoorDash's courier network and Instacart's picking and delivery technology, including their developed advertising and AI tools.
"Groceries are one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you would choose yourself, and deliver the ice cream before it melts," stated Tony Xu, founder and CEO of DoorDash. The companies project that Instacart customers will gain access to over 50,000 additional stores, expanding beyond the nearly 100,000 currently on the platform.
Subscribers to both DashPass and Instacart+ will consolidate their memberships into a single subscription, estimated to save them around $100 million annually. DoorDash has committed to maintaining the Instacart brand and app, and will not compel grocery chains to work exclusively with them. "The combination of our technology with DoorDash's global reach and logistics capabilities will allow us to do even more," said Chris Rogers, CEO of Instacart.
The deal, expected to close by late 2027 or the first half of 2028, is contingent upon approval from Instacart shareholders and regulators in the U.S. and Canada, as well as clearance under Israel's economic competition law, given DoorDash's operation there via Wolt. Approximately 75% of the payment will be in cash, with the remainder in DoorDash stock. DoorDash plans to fund the acquisition from its cash reserves and a loan from JPMorgan Chase. Until the deal's completion, both companies will continue to operate independently. DoorDash currently operates in over 40 countries and also owns the British delivery service Deliveroo.
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