DoorDash in advanced talks to buy Instacart

DoorDash is in advanced talks to acquire grocery-delivery rival Instacart, according to people familiar with the matter. A deal could be announced in the coming days or as soon as this week, though people familiar with the matter caution that the negotiations could still fall apart and no final agreement has been reached.

One account places the potential transaction value at around $17 billion. It has not been determined what final price will be agreed or how a transaction would be structured, and neither company has publicly commented on the talks.

The news had an immediate impact on both companies’ shares. DoorDash stock fell 4.2% after news emerged that it was in talks to purchase Instacart. Instacart shares moved in the opposite direction, rising 5.6% as investors reacted to the possibility of a sale at a premium to the company’s current valuation.

Instacart has been exploring a sale process and has previously been in discussions with potential buyers, including Uber (UBER) and DoorDash. Bloomberg later reported that interest from Uber had cooled, leaving DoorDash as the focus of current negotiations. Instacart declined to comment on the latest talks, and DoorDash did not immediately respond to requests for comment.

A combination of DoorDash and Instacart would create a large home-delivery player by merging Instacart’s grocery-store-centric platform with DoorDash’s restaurant-focused network. DoorDash has a market capitalization of roughly $75 billion, and integrating Instacart’s grocery relationships and logistics could significantly expand its presence in the broader delivery market.

The grocery and home-delivery sector faces strong competition from large retailers such as Amazon and Walmart, which have exerted pressure on traditional grocers. A larger combined platform could alter competitive dynamics for grocery delivery and restaurant takeout, though the ultimate effect will depend on whether a definitive agreement is reached and on the final terms of any deal.

DoorDash previously bid for Instacart in 2021 at a significantly higher valuation, but those negotiations collapsed over price and concerns about potential antitrust pushback. One account places the potential transaction value at around $17 billion.

Earlier antitrust worries were cited as a factor in the failure of prior talks, but those earlier issues do not hold true in the same way today. While the present negotiations remain uncertain and subject to change, they represent a renewed effort by both companies to explore a combination that could reshape parts of the on-demand delivery landscape.