DoorDash in Advanced Talks to Buy Instacart for About $17 Billion; Instacart Jumps 8%, DoorDash Falls 6%

DASH is in advanced talks to acquire Instacart parent CART in a deal that could value the grocery-delivery company at roughly $17 billion, the Wall Street Journal reported Monday, October 26, citing people familiar with the matter. An agreement could come as soon as this week, though there is no guarantee talks produce a deal. Reuters, which confirmed the talks, said a deal could be finalized as early as Wednesday and that Instacart's discussions with UBER are no longer active. The Information had reported on Friday that Instacart was exploring a sale and had held preliminary talks with both Uber and DoorDash.

The reported price is more than 30% above Instacart's market value of about $13 billion before the news. Instacart rose 7.87% to $60.88 on Monday after touching a 52-week high of $62.00, while DoorDash fell 6.1% to $168.44, according to 24/7 Wall St. DoorDash had a market value of about $73 billion, per the WSJ. The price per share, the mix of cash and stock, the financing and any breakup fee have not been disclosed.

The talks land as competition in grocery delivery has intensified, with Walmart and Amazon expanding their own offerings. Instacart also disclosed in a regulatory filing on Monday that it will wind down Caper, the smart-cart business it bought in October 2021, with expected pre-tax charges of $55 million to $80 million; the company presented that decision separately from the sale reports. Instacart has explored a sale before, in 2021.

What to watch: whether a signed agreement arrives this week and on what terms, any antitrust scrutiny of combining two major delivery platforms, and how DoorDash, which completed its Deliveroo acquisition about a year ago, frames financing and integration. DoorDash reports third-quarter results after the market close on Wednesday, November 4.