DoorDash

DoorDash agreed to buy Instacart for about 17 billion dollars, which works out to 65 dollars a share. Instacart already partners with nearly 100,000 stores, and the deal could give its customers more than 50,000 additional stores to shop from. Families use Instacart for the big weekly shop and DoorDash for quick meals, so together they could cover almost every way people buy food online.

DoorDash is buying while its own business is strong. Revenue grew about 28% over its last full year, and since 2013 the company has handled over 10 billion orders and brought in more than 230 billion dollars in sales for local businesses. If the deal closes, DashPass and Instacart+ members would pay one membership fee instead of two, which the company estimates would save them about 100 million dollars a year.

This is a big check to write. DoorDash is paying 26% more than Instacart's stock was worth before news of the deal leaked, and the 17 billion dollar price equals roughly a fifth of DoorDash's own value of about 78 billion dollars. At least 75% of the price will be paid in cash, partly with borrowed money. Profits are already thin, with only about 6 cents of every sales dollar left over, so there is little room for mistakes.

The deal isn't expected to close until the end of 2027 or the first half of 2028. It still needs approval from Instacart shareholders and from government regulators in the US, Canada, and Israel, who may look closely at combining two major delivery apps. Owners of about 19% of Instacart shares have already agreed to vote yes, but the long wait brings uncertainty and could pull management's attention away from DoorDash's main business.