DoorDash to buy Instacart for $65 a share, mostly in cash

The deal values Instacart at about $17 billion. It is expected to close in late 2027 or the first half of 2028.

DoorDash will buy Instacart for $65 a share. At least 75 per cent of the price will be paid in cash, and up to 25 per cent in DoorDash stock. Instacart's board has approved the deal unanimously.

Instacart holders can choose cash, DoorDash Class A common stock, or a mix of $48.75 in cash and 0.0843 DoorDash shares. Elections are subject to proration, so the final mix may differ from a holder's choice.

DoorDash has secured a $13.0 billion bridge financing commitment from JPMorgan Chase Bank to help fund the cash portion. Bridge financing is short-term money meant to be replaced by longer-term funding. DoorDash is also running its own $5.0 billion buyback. It has bought back 6.8 million shares for $1.0 billion under that authorization.

The deal is expected to close in late 2027 or the first half of 2028. The timing depends on approval from Instacart shareholders and regulators. Antitrust review is the main constraint.

DoorDash reported third-quarter earnings of $1.06 a share. Revenue was $4.62 billion, against $4.65 billion expected. For the fourth quarter, DoorDash expects marketplace gross order value (the total value of orders placed) of $35.4 billion to $36.4 billion. It expects adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding certain items) of $900 million to $1.1 billion.

Citi analyst Ronald Josey wrote on October 26 that a valuation of $16 billion to $17 billion implied about $65 a share at the midpoint, 7 per cent above that day's close.

CNBC reported that Instacart's market value was about $13 billion before its shares rose 8 per cent on Monday, October 26, after a Wall Street Journal report of talks. DoorDash's market value was around $73 billion.

The future of Instaleap and Instacart's buyback program are tied to the closing of the deal. Combining two delivery networks that compete for the same drivers and household spend is the main unknown. The antitrust review timeline, not the headline price, will set how quickly DoorDash can bring Instacart's enterprise and advertising units into its business.