DoorDash plans to buy Instacart for $17 billion, creating a delivery powerhouse

DoorDash has agreed to acquire Instacart. Bloomberg/Getty Images Two of the biggest names in food delivery are coming together.DoorDash plans to acquire Instacart in a deal worth about $17 billion, the companies said Thursday. The deal is expected to close at the end of 2027 or in the first half of 2028.The acquisition would combine DoorDash's historical dominance in restaurant delivery with Instacart's roster of grocery partnerships, creating one company to deliver much of customers' weekly dining needs."Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve," said Chris Rogers, the CEO of Instacart. DoorDash has been growing its grocery business since the pandemic, which pushed many shoppers out of stores and toward delivery services as they stayed home more. Since then, the company has partnered with dozens of grocers, creating a selection that rivals Amazon's with less infrastructure, CEO Tony Xu said earlier this year.Instacart, meanwhile, has focused on grocery delivery since its inception in 2012. The startup delivered orders from Whole Foods before Amazon bought the chain in 2017. It now works with thousands of retailers in North America and sells retail technology, from digital price tags to smart shopping carts.In a joint announcement, the companies said the deal would mean Instacart customers could shop at more than 50,000 additional stores, and that DashPass and Instacart+ members would pay one membership fee instead of two. The deal, which will be at least 75% cash, values Instacart at $65.00 per share, representing a 26% premium over its closing price on October 22. Taking on Amazon and Uber The combined company will be a more formidable competitor in the competitive grocery delivery industry. Amazon has spent years trying to increase sales in its grocery business, including a rollout of same-day perishable food deliveries to more parts of the US over the past year.Uber has also grown its restaurant and grocery delivery business through Uber Eats. The company has recently moved deeper into premium ride-hailing options, such as black car services, as well as travel through a hotel-booking partnership with Expedia.Both DoorDash and Instacart have relied on gig workers to pick orders and make deliveries. As independent contractors, most don't receive many of the same benefits as full-time workers, such as health insurance or contributions to retirement accounts.Do you have a story idea about DoorDash and/or Instacart? Contact this reporter at abitter@businessinsider.com or via encrypted messaging app Signal at 808-854-4501. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. Read next Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Business Insider tells the innovative stories you want to know Alex Bitter is a senior retail reporter covering Uber, Lyft, DoorDash, Instacart, and related companies. His coverage ranges from the experiences of gig workers to what's happening inside the world's biggest ride-hailing and delivery companies.Alex has also written about the retail and food industries. Convenience store chain Sheetz ended its "smile policy" after his reporting. Alex lives in the Washington, DC, area, where you can find him studying ancient coins or searching for Civil War artifacts with his metal detector in his free time.Got a tip? Reach out at abitter@businessinsider.com or via encrypted messaging app Signal at +1 (808) 854-4501. Delivery m&a