DoorDash has agreed to buy grocery delivery rival Instacart in a deal worth about $17 billion, the companies announced on Thursday. Instacart shareholders will receive $65 for each share, in cash, DoorDash stock or a mix of the two, a 26% premium to Instacart's closing price on 22 October, the last trading day before reports of a possible sale emerged. Instacart's board has unanimously approved the agreement, and shareholders holding about 19% of its stock have agreed to vote in favour.

What happens to the brands

DoorDash said it expects to keep Instacart's brand, app and enterprise technology products after the deal closes, and the two companies will keep operating independently until then. Instacart customers could gain access to more than 50,000 extra stores, while DashPass and Instacart+ members would pay a single membership fee instead of two, saving an estimated $100 million a year in fees. The combined group would pair DoorDash's delivery network with Instacart's grocery technology and its partnerships with more than 2,200 retail banners.

A long road to closing

The deal is expected to close in late 2027 or the first half of 2028, subject to Instacart shareholder approval and antitrust clearance in the United States, Canada and Israel. DoorDash plans to fund the cash part with money on hand and debt from JPMorgan Chase, while aiming to keep investment-grade ratings. DoorDash also reported third-quarter gross order value up 36% to $33.9 billion, beating analyst expectations, on the same day it announced the deal.

Sources: Bloomberg via Moneyweb, DoorDash / Instacart joint announcement via Business Wire.