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DoorDash in Advanced Talks to Acquire Instacart for $17 Billion, WSJ Reports
DoorDash (NYSE: DASH) is in advanced discussions to acquire grocery-delivery competitor Instacart (NASDAQ: CART), with a potential deal valuing Instacart at around $17 billion, The Wall Street Journal reported on Monday, citing people familiar with the matter. While an agreement could be announced as soon as this week, the sources cautioned that the talks could still fall apart and a deal is not guaranteed.
Market Reaction
The report triggered significant stock movements for both companies. Instacart shares rose 4% in Monday trading, building on a 9% gain from Friday after The Information first reported that the company was exploring a sale and had held preliminary talks with DoorDash and Uber.
Conversely, shares of the potential acquirer, DoorDash, fell by 5% on Monday. The reported $17 billion valuation for Instacart implies a substantial premium over its market capitalization of approximately $12 billion before the initial reports surfaced.
AdContext and Potential Hurdles
A combination of DoorDash and Instacart would unite two of the largest players in the U.S. food and grocery delivery market. Instacart, which went public in 2023, has experienced slowing growth amid intense competition from rivals including DoorDash, Uber, and Amazon.
This is not the first time the two companies have explored a merger. DoorDash and Instacart previously held acquisition talks in 2021, when Instacart was reportedly valued between $40 billion and $50 billion. Those negotiations ultimately collapsed, partly due to concerns over potential regulatory challenges. Any new deal would likely face significant antitrust scrutiny from regulators given the considerable overlap in the companies' businesses.
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