DoorDash Inc. has struck a deal to acquire its rival Instacart in a transaction valued at approximately $17 billion. The agreement, announced on Thursday, marks another major consolidation move in the fiercely competitive food and grocery delivery sector, where giants like Walmart Inc. and Amazon.com Inc. dominate.
The acquisition will see DoorDash pay $65 per share in a mix of cash and stock. This price represents a 26% premium over Instacart’s closing stock price on October 22, the last trading day before reports surfaced that Instacart was considering a sale. Earlier this week, Bloomberg had revealed that DoorDash and Instacart were in advanced stages of deal negotiations.
DoorDash also released its third-quarter earnings ahead of schedule, a move that underscores the strategic importance of this acquisition. The deal is expected to reshape the delivery landscape, potentially allowing DoorDash to better compete against the retail behemoths Walmart and Amazon.