- DoorDash agreed to buy Instacart for about $17 billion. It will pay $65 a share in cash and stock, an 11% premium to Instacart’s Wednesday close and about 26% above its Oct. 22 close, the last trading day before reports of a possible sale surfaced.
- Investors cheered the buyer. DoorDash shares jumped more than 6% in Thursday morning trading, while Instacart, which trades as Maplebear, hovered near the flatline after rising 4.8% premarket before a trading halt.
- DoorDash also beat on its own quarter. Adjusted EPS was $1.06 against an 84-cent LSEG estimate, revenue was $4.62 billion versus $4.56 billion expected, marketplace gross order value grew 36% to $33.9 billion and total orders rose 28% to 993 million.
- The finish line is far away. The companies expect the deal to close at the end of 2027 or early 2028, and analysts have warned that the overlap between the two delivery platforms could attract antitrust scrutiny.
What Happened?
The companies announced the deal Thursday alongside DoorDash’s third-quarter results. Speculation had swirled since last week, when The Information reported that Instacart was exploring a sale and had held talks with Uber and DoorDash, and several outlets reported on Monday that DoorDash was in advanced discussions. DoorDash expects to keep Instacart’s brand, enterprise technology products and app after closing. CEO Tony Xu called grocery “one of the hardest things to get right online,” pointing to inventory selection and delivering perishables without damage.
Why It Matters?
The deal gives DoorDash, which started in restaurant delivery and has added retailers such as Sephora, Macy’s and Staples plus a Kroger partnership, a much larger grocery footprint. Instacart was a big pandemic winner but has struggled to keep its momentum, and in December it agreed to pay $60 million to settle FTC allegations over false advertising and subscription practices. Both companies face mounting pressure from Amazon and Walmart, which have pushed further into same- and next-day delivery that threatens the on-demand model.
What’s Next?
Regulatory review is the main hurdle over a long closing timeline. Wedbush analysts wrote that third-party platforms “remain a minority of total grocery consumption,” but that defining the online market more narrowly, or from the perspective of grocers as enterprise customers, “can make approvals more challenging.” Investors will watch how far Instacart trades below the $65 offer as a gauge of perceived deal risk, and how Amazon and Walmart respond on delivery speed and pricing.
Affected Tickers and Coins: DASH, CART, AMZN, WMT, KR
Source: CNBC
