TLDR
- DoorDash (DASH) stock rose 6% to $180.06 after it agreed to buy Instacart (CART) for about $17 billion.
- DoorDash will pay $65 a share, a 26% premium, with at least 75% of it in cash.
- Instacart stock was flat near $58.35 in early trading, after a record high of $62 on Monday.
- The deal is expected to close at the end of 2027 or the first half of 2028, with regulatory approval seen as the main risk.
- Instacart would owe a $650 million termination fee, and DoorDash would owe $1.25 billion under certain circumstances.
DoorDash (DASH) stock rose 6% to $180.06 on Thursday after the company said it will buy Instacart (CART) for about $17 billion. The move came as DoorDash also posted better-than-expected quarterly revenue.
DoorDash will pay $65 a share for Instacart. That is a 26% premium to the Oct. 22 close, before reports of deal talks first came out.
At least 75% of the price will be paid in cash. Instacart stockholders can choose cash, DoorDash stock, or a mix of both.
Instacart’s board approved the deal unanimously. It is the biggest acquisition DoorDash has made.
Instacart stock, formally known as Maplebear, was little changed at $58.35 in early trading. It hit a record high of $62 on Monday.
DoorDash stock is still down about 25% this year through its last close. Thursday’s jump takes a small bite out of that hole.
What Management Said
CEO Tony Xu said grocery is “one of the hardest things to get right online.” He said Instacart has spent years learning to do it well for grocers.
Xu said DoorDash has built a delivery network that local stores rely on. Together, he said, the companies could give stores of every size more tools.
Instacart founder Apoorva Mehta said the two companies had explored a combination on and off for years. So this one has been a long time coming.
Customers will get two memberships for the price of one. Instacart shoppers could also reach more than 50,000 additional stores, on top of the nearly 100,000 on the platform today.
Competition and Regulatory Hurdles
Walmart (WMT) and Amazon (AMZN) have been taking ground in grocery delivery, mainly same-day and one-hour orders. Wedbush says Walmart holds about 30.9% of online grocery, ahead of Amazon at 23.6%.
Wedbush analyst Ygal Arounian said strong restaurant delivery paired with Instacart’s grocers could be a “critical combination” against both. Morningstar’s Martin Szumski said restaurant delivery is maturing, and growth now lies in weekly grocery trips and retail.
The deal is expected to close at the end of 2027 or the first half of 2028. CFRA Research said the main risk is regulatory approval, and the long window suggests both sides expect an extended antitrust review.
New York City’s Department of Consumer and Worker Protection said Wednesday that a merger continued a “troubling trend” of corporate consolidation. DoorDash plans to keep Instacart’s brand and app, and will not require grocers to use its delivery services exclusively.
A regulatory filing shows Instacart would pay DoorDash a $650 million termination fee if the deal ends under certain circumstances. DoorDash would pay $1.25 billion.
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