DoorDash announced on Thursday that it plans to acquire rival Instacart for $17 billion in a massive delivery merger combining restaurant takeout and grocery delivery, according to TechCrunch. Both company boards approved the transaction, which values each Instacart share at $65.
Key takeaways
- DoorDash agreed to acquire Instacart for $17 billion in a deal valued at $65 per share.
- The boards of both companies have approved the transaction.
- DoorDash plans to keep the Instacart brand, app, and enterprise technology products.
- The transaction is expected to close toward the end of 2027 or in the first half of 2028.
Why did DoorDash acquire Instacart?
TechCrunch reports that the acquisition brings two major delivery giants together under one roof. DoorDash CEO Tony Xu noted that online grocery delivery is difficult because items require careful selection and prompt transit. Instacart spent years mastering that process for grocers while DoorDash built a strong delivery network.
Instacart CEO Chris Rogers stated that joining forces allows the company to do even more by combining its grocery tech and retailer relationships with DoorDash consumer reach and logistics capabilities. Bloomberg previously reported that Instacart held talks with Uber before walking away from those discussions.
What changes for the grocery delivery market?
DoorDash plans to keep Instacart operating as an independent company until the transaction closes. Grocers could use Instacart technology to build online ordering platforms and advertising businesses. They might also use DoorDash fulfillment services to handle online orders and offer lower-cost delivery.
What happens next?
Instacart currently holds a market cap of more than $13 billion with its stock price up 25% for the year to date. The agreement is expected to close toward the end of 2027 or in the first half of 2028. Both brands will continue to run separately until that time.
Frequently asked questions
TechCrunch reports that DoorDash agreed to acquire Instacart for $17 billion, paying $65 for each Instacart share.
Tony Xu serves as the CEO of DoorDash, and Chris Rogers serves as the CEO of Instacart.
The transaction is expected to close toward the end of 2027 or in the first half of 2028.
No, DoorDash plans to keep the Instacart brand, app, and enterprise technology products while operating independently until the deal closes.
Bloomberg previously reported that Instacart was in talks with Uber before walking away from those discussions.
Based on reporting by TechCrunch. Read the original article
