DoorDash to Buy Instacart in $17 Billion Deal, Expanding Stores for Shoppers to 150,000

US food delivery company DoorDash is acquiring grocery delivery firm Instacart in a $17 billion deal, worth £12.8 billion, creating a behemoth that the firms said will bring more meals, quick-need purchases and big weekly shops directly to customers.

DoorDash said the deal, expected to be final in about a year, will expand options for customers and let more sellers use the companies' services.

After the deal, Instacart shoppers will be able to buy from 150,000 stores, up from the current 100,000, the firms said, while DoorDash will reach beyond restaurants into retail.

Instacart chief executive Chris Rogers said: 'Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve.'

Rogers also said that over the last 14 years Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and that joining forces with DoorDash allows the company to do even more.

DoorDash co-founder and chief executive Tony Xu said the acquisition will allow the company to use Instacart's grocery selection and substitution expertise. He said: 'Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you'd choose yourself, and get the ice cream to you before it melts.'

Xu added that Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day.

The deal is expected to be done by the end of 2027 or the first six months of 2028. It is DoorDash's biggest acquisition to date, and could help it take on delivery giants like Amazon, the report said.

Morningstar analyst Martin Szumski told Reuters that the growth area in food delivery was shifting. He said: 'Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders: weekly grocery shops, convenience items, and retail.'

Under the agreement, DoorDash will acquire Instacart at $65 a share, a 26 percent premium on the closing price of Instacart stock on October 22, the price before news of the potential merger first emerged. The deal will be at least 75 percent cash, DoorDash said.

DoorDash plans to keep Instacart's brand, app and technology products. The delivery services will keep operating as independent companies until the deal is concluded.

The merger may, however, raise antitrust issues with government regulators, Reuters reported. New York City's commission on consumer and worker protections, which last month reached a $131.5 million settlement with DoorDash over allegations of underpaying workers, said in a statement: 'This proposed merger continues a troubling trend of mega-corporations consolidating.' It added: 'Whether or not this merger proceeds, we will fully enforce delivery workers' rights.'