New York:US delivery company DoorDash has announced its agreement to acquire grocery delivery technology platform Instacart in a cash-and-stock transaction valued at approximately $17 billion. This acquisition, which was revealed by both companies on Thursday, includes a payment of $65 per share of Instacart, reflecting a 26% premium over its closing price on October 22.

According to Anadolu Agency – English, the terms of the deal specify that at least 75% of the purchase price will be paid in cash, while the remaining 25% will be in DoorDash stock. Instacart shareholders have the option to choose between receiving all cash, DoorDash shares, or a combination, although this is subject to proration.

Tony Xu, co-founder and CEO of DoorDash, expressed that the merger aims to enhance the grocery delivery experience by providing better tools for stores of all sizes. Instacart's CEO Chris Rogers highlighted the potential for innovation and expansion of opportunities for retail and brand partners as a result of combining Instacart's technology with DoorDash's logistics and consumer reach.

Following the merger, Instacart customers will benefit from access to an additional 50,000 stores, supplementing the nearly 100,000 retail locations currently available on its platform. The companies also plan to integrate their membership programs, potentially saving users an estimated $100 million per year.

DoorDash has committed to maintaining Instacart's brand and technology products, ensuring that local grocers will not be subject to platform exclusivity. The cash portion of the acquisition will be funded through DoorDash's existing cash reserves and a bridge loan facility from JPMorgan Chase Bank.

The transaction is anticipated to be finalized in late 2027 or the first half of 2028, pending antitrust clearance in the US and regulatory approvals in Canada and Israel, as well as the approval of Instacart stockholders. Shareholders holding approximately 19% of Instacart's stock have already agreed to support the merger.