DoorDash and Instacart agree to a $17 billion grocery delivery deal

DoorDash and Instacart have signed an agreement for DoorDash to acquire Instacart in a deal valued at about $17 billion, according to the Associated Press. The agreement gives Instacart shareholders a choice of cash, DoorDash shares, or a mix, subject to limits and proration. The merger agreement is also filed with the Securities and Exchange Commission.

This is more than one delivery app buying another. DoorDash brings a broad logistics network, while Instacart has long relationships with grocers and software that some retailers use for online storefronts. The companies say the combination can help local stores compete with larger retailers. Instacart's brand, app, and enterprise products are expected to remain after closing.

The harder question is whether grocers will trust a company that both powers their digital storefronts and competes for delivery orders. The AP reports that the proposed combination could reduce competition and leave stores with fewer partners. That concern makes this a major business bet as well as a large acquisition.

The deal has not closed. It still needs Instacart shareholder approval and regulatory clearance, and the companies expect a closing no earlier than late 2027. Until then, both businesses say they will operate separately. The key test will be whether DoorDash can combine delivery reach and grocery technology without making retailers feel that the platform works against them.