DoorDash Agrees to Buy Instacart for About $17 Billion, Paying $65 a Share

DoorDash said on Thursday that it has agreed to buy Instacart, ending a week in which the grocery-delivery company was widely reported to be shopping itself. The deal puts an equity value of about $17 billion on Instacart, and the price is $65 a share, according to DoorDash's filing with the US Securities and Exchange Commission. That is a 26 percent premium to Instacart's close on 22 October, the last trading day before reports of a deal emerged.

Earlier this week the Digest reported that Instacart was reportedly exploring a sale, with DoorDash and Uber said to have held talks. The new development is that one suitor won. TechCrunch noted that Bloomberg had reported Instacart was in talks with Uber but walked away from those discussions. Both boards have approved the agreement, and DoorDash announced it on the same day it released third-quarter results.

What do Instacart shareholders get?

Each Instacart share can be exchanged for $65 in cash, for 0.3372 shares of DoorDash stock, or for a mix of $48.75 in cash and 0.0843 DoorDash shares. Stock is capped at 25 percent of the total consideration, with proration if too many holders ask for shares, so at least three-quarters of the price will be paid in cash. DoorDash says the cash will come from money on hand and debt, and JPMorgan has committed to a 364-day senior unsecured bridge loan. The deal is not conditional on financing.

Instacart's board approved the agreement unanimously, and holders of about 19 percent of its shares have agreed to vote in favour.

When could the Instacart deal close?

Not soon. DoorDash expects completion toward the end of 2027 or in the first half of 2028. The filing lists the expiry of the US Hart-Scott-Rodino antitrust waiting period, approvals from other regulators including those in Canada and Israel, and a vote by Instacart stockholders as conditions. Until then the two companies will keep operating separately, and shoppers should not expect their apps to change.