DoorDash has announced a deal to buy delivery market competitor Instacart, in a move that will leave users with one fewer iPhone app-based delivery option.
DoorDash announced the move via a press release, noting that the $65-a-share buyout price represents a 26% premium on Instacart's closing price from October 22, 2026. The aggregate transaction consideration will be made up of at least 75% cash, with shareholders able to choose cash or DoorDash shares as payment.
While the deal is yet to be completed, it's in both company's interests for the purchase to go ahead. Termination fees would see Instacart pay $650 million and DoorDash $1.25 billion should the deal falter.
For DoorDash, the deal represents an opportunity for the company to expand beyond restaurant food deliveries and into the grocery market and beyond. Instacart had already held talks with Uber about the potential for a deal that ultimately came to nothing.
Consolidation concerns
While DoorDash believes that the deal to buy Instacart will see consumers "benefit from more choice" and enjoy "affordable delivery and savings," many will have concerns. Consolidation of options within any industry, removing competition, usually means the opposite of what DoorDash claims will happen.
Those who work to deliver food and groceries may also be concerned that their pay will be reduced as a result of the lack of competition in the space. DoorDash again argues the opposite, claiming that there will be more earning opportunities generated by the buyout.
However, while the deal is not expected to be completed until the end of 2027 at the earliest, there are still hurdles to overcome. Regulatory approval is required, and an antitrust review is likely.
Despite that likelihood, the current regulatory situation within the United States is favorable to deals of this kind.
Before the buy, WalMart has command of the grocery delivery market. Should the deal pass, the DoorDash/Instacart combo is estimated to hold around 60%.