DoorDash Agrees to Acquire Instacart for $17 Billion

DoorDash will pay $65 per share in a mix of cash and stock to acquire Instacart, a deal valued at approximately $17 billion in equity. The agreement was filed with the Securities and Exchange Commission and approved by both boards on Wednesday. If regulators approve the transaction, the companies plan to close it by the end of 2027 or in the first half of 2028.

The merger requires Instacart stockholder approval and clearance from the Federal Trade Commission or the Department of Justice. The companies are not treating the process as a formality. The filings include a $1.25 billion breakup fee for DoorDash and a $650 million fee for Instacart if the deal fails under specific conditions. These financial penalties are tied to antitrust approval, indicating that both parties anticipate regulatory scrutiny.

Critics argue the combination would reduce competition in grocery delivery. The American Economic Liberties Project estimates the merged entity would control nearly 60% of the third-party grocery delivery market. A report by Rep. Becca Balint and Sen. Elizabeth Warren on October 22 alleged that the current administration approves harmful mergers too frequently. The report cites the Compass and Anywhere real estate merger as an example, claiming Compass gained control of up to 70% of home sales in certain areas.

Proponents point to cost savings for consumers. The companies estimate that consolidating DashPass and Instacart+ memberships will save customers about $100 million annually. DoorDash states that shoppers will gain new earning opportunities and that grocers can continue using multiple delivery platforms without exclusivity agreements.

Both firms are currently under separate regulatory investigations. The FTC ordered nine delivery and ride-hailing companies to provide data on how they use personal information for pricing. Instacart faced scrutiny after a study found some shoppers were charged up to 23% more through AI-enabled pricing experiments. DoorDash recently agreed to a $131.5 million settlement with New York City over courier pay, which includes $16.7 million in fines and $115 million in relief for about 264,000 workers.

The final decision rests with federal antitrust authorities. Under the Sherman Act, a merger is judged on whether it will reduce competition before it occurs. The waiting period review is the primary mechanism for this assessment. DoorDash and Instacart must navigate this process before any consolidation of their services can take place.