The DoorDash Instacart deal is the biggest shake-up in grocery delivery since the pandemic. On Thursday, DoorDash agreed to buy Instacart for about $17 billion, CNBC reported. Within hours, the usual voices were calling it a threat. Before Washington picks a side, though, it should ask one simple question: will your grocery bill go up or down?
That is the right test for the DoorDash Instacart deal and any other merger. Size alone is not a crime. A deal earns approval or rejection at the checkout, not in a press release from either side.
Key Takeaways
- DoorDash agreed to buy Instacart for $65 a share, an equity value of about $17 billion, with at least 75% paid in cash.
- The companies expect the deal to close at the end of 2027 or the first half of 2028, after reviews in the U.S., Canada and Israel.
- DoorDash says members would pay one fee instead of two and could shop at about 150,000 stores.
- DoorDash agreed to pay Instacart $1.25 billion if antitrust problems kill the deal.
- Conservatives should judge the merger by prices and choices for families, not by how big the company gets.
What the DoorDash Instacart Deal Actually Says
Here are the numbers. According to the DoorDash announcement, DoorDash will pay $65 for each Instacart share. That price sits 26% above Instacart’s close on Oct. 22, the last trading day before media reports of a sale. At least three-quarters of the price comes in cash. DoorDash plans to cover it with cash on hand and borrowed money, backed by a bridge loan commitment from JPMorgan.
DoorDash also says it will keep Instacart’s brand and app. Until the deal closes, the two firms will keep running as separate companies. Holders of about 19% of Instacart’s shares have already agreed to vote yes.
Investors liked the DoorDash Instacart deal. DoorDash shares jumped more than 6% in morning trading Thursday, CNBC reported. On the same day, DoorDash posted third-quarter revenue of $4.62 billion. Total orders also grew 28% from a year earlier, to 993 million.
Why DoorDash Wants Grocery
Restaurant delivery is slowing down as a growth story. “Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders: weekly grocery shops, convenience items, and retail,” Morningstar analyst Martin Szumski told Reuters, according to the BBC.
In other words, DoorDash wants your weekly shop, not just your Friday pizza. Grocery is hard to do online, and CEO Tony Xu admits it. “Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts,” he said. Instacart has spent 14 years building that skill. So DoorDash is buying know-how it would otherwise need years to build.
Meanwhile, Instacart needed a partner. CNBC noted that the company struggled to keep its pandemic momentum. It also agreed in December to pay $60 million to settle Federal Trade Commission claims of false advertising and unlawful subscription sign-ups. That history matters. A buyer with a stronger network could fix the service, or it could simply inherit the bad habits.
Bigger Isn’t Automatically Worse
Critics of the DoorDash Instacart deal moved fast. Last month, DoorDash settled with New York City’s consumer and worker protection office for $131.5 million over claims that it underpaid workers. Now that office calls the merger part of “a troubling trend of mega-corporations consolidating.” Notice what that statement skips. It says nothing about prices, choices or service.
That is the problem with treating every large deal as guilty. For decades, American antitrust law has asked whether a merger hurts consumers. That standard keeps the government focused on facts instead of feelings. Once regulators start blocking deals simply because a company is big, they stop protecting shoppers and start picking winners.
Conservatives have seen this movie before. When Washington goes after a company, the penalty should fit the harm. We made that case when regulators tried to hit Facebook with a $25 billion fine. The same principle applies here. Punish real harm, and leave lawful competition alone.
Besides, this market is not a two-player game. Amazon and Walmart both push same-day and next-day delivery hard. In fact, the BBC reported the deal could help DoorDash take on Amazon. A stronger third option against two retail giants may well mean more competition, not less.
Where the DoorDash Instacart Deal Deserves Scrutiny
None of this means a free pass. Even friendly analysts expect a fight. Wedbush analysts wrote that third-party delivery apps “remain a minority of total grocery consumption”. Still, they warned that a narrower view of the online market “can make approvals more challenging.”
The companies clearly know it. DoorDash agreed to pay Instacart $1.25 billion if antitrust obstacles block the deal, MLex reported, citing a securities filing. Nobody signs a check that size without expecting tough questions.
So regulators should ask fair ones. Will local grocers face higher fees to reach customers? Could drivers and shoppers lose bargaining options? And do delivery fees rise once two rivals become one? Those are factual questions with factual answers. If the evidence shows real harm, conditions or a block are fair. If it doesn’t, the government should step aside.
What It Means for Your Wallet
DoorDash makes three promises. First, members of DashPass and Instacart+ would pay one membership fee instead of two. The company estimates that saves customers $100 million a year. Second, Instacart users could shop at more than 50,000 additional stores. Third, local stores would gain the same tools big retailers build for themselves.
Those are big claims, and families should hold the company to them if the DoorDash Instacart deal closes. Inflation still squeezes household budgets, as we noted when the Fed weighed rates against stubborn inflation. A deal that trims a fee and adds choice helps. On the other hand, a deal that quietly raises prices after the cameras leave does not.
For small-town shoppers and local grocers, the stakes are real. A mom-and-pop store that can reach customers through a bigger app may finally compete with the national chains. That is how markets are supposed to work. Let the companies prove their promises, let shoppers decide, and keep Washington focused on evidence.
Frequently Asked Questions
How much is DoorDash paying for Instacart?
DoorDash agreed to pay $65 a share, which values Instacart at about $17 billion. At least 75% of the price will be paid in cash, and the rest may come in DoorDash stock.
When will the DoorDash Instacart deal close?
The companies expect it to close at the end of 2027 or in the first half of 2028. First, it needs Instacart shareholder approval and antitrust clearance in the U.S., Canada and Israel.
Will Instacart go away?
No, at least not by DoorDash’s plan. DoorDash says it will keep the Instacart brand, app and business technology. Until closing, both firms will operate as separate companies.
What do you think? Should regulators let this deal through, or does it give one company too much control over your groceries? Tell us in the comments.
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