Deals

DoorDash Agrees To Buy Instacart At $65 A Share, With A $1.25 Billion Antitrust Break Fee

The roughly $17 billion deal is at least 75% cash, backed by a bridge loan of up to $13.0 billion from JPMorgan.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 2 min read
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DoorDash Agrees To Buy Instacart At $65 A Share, With A $1.25 Billion Antitrust Break Fee

DoorDash agreed to buy Instacart for $65.00 a share, a deal the companies value at about $17 billion in equity, and it will owe Instacart $1.25 billion if antitrust rules kill the merger. The price is a 26% premium to Instacart's October 22 close, the last trading day before media reports of a possible deal.

Cash-heavy terms with a stock cap

DoorDash, which runs the DoorDash, Wolt and Deliveroo delivery marketplaces, said in a joint announcement that at least 75% of the consideration will be cash. Instacart holders can elect $65.00 in cash, 0.3372 DoorDash shares, or $48.75 in cash plus 0.0843 shares. Stock is capped at 25% of the total and prorated if elections for it exceed that. Holders who make no election get cash.

JPMorgan Chase committed to a 364-day senior unsecured bridge loan of up to $13.0 billion to fund the cash. DoorDash expects to replace it before closing with cash on hand and permanent financing, and the deal has no financing condition. The company said it is targeting a capital structure that keeps investment-grade ratings.

Break fees favor Instacart on antitrust

DoorDash would pay Instacart $1.25 billion if the deal fails because antitrust conditions remain unmet at the outside date while all other conditions are met or waived, or because a final antitrust-related legal restraint blocks it. Instacart would owe DoorDash $650 million under specified circumstances, such as taking a superior offer.

Holders of about 19% of Instacart's voting power agreed to vote for the merger. Instacart's board approved it unanimously.

Groceries, memberships and a long timeline

Instacart, a grocery technology company, works with more than 2,200 retail banners representing nearly 100,000 stores. DoorDash said Instacart customers could shop at more than 50,000 additional stores. It estimated DashPass and Instacart+ members would save $100 million a year on membership fees by paying one fee instead of two.

DoorDash committed to no grocery exclusivity and said it expects to keep Instacart's brand, enterprise technology and app. "Grocery is one of the hardest things to get right online," said Tony Xu, DoorDash's co-founder and CEO.

The companies expect closing at the end of 2027 or in the first half of 2028. Instacart stockholders must approve it, and the Hart-Scott-Rodino waiting period must expire, along with clearances in Canada and Israel.

DoorDash was due to discuss the deal on its earnings call at 8:30 a.m. ET Thursday, alongside its third-quarter results.

Sources

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