DoorDash has agreed to acquire Instacart, bringing the grocery-delivery platform under DoorDash as a wholly owned subsidiary if the transaction closes. Instacart shareholders can choose among cash, DoorDash stock or a combination of the two, subject to limits on how much stock DoorDash will issue.
The deal still requires Instacart shareholder approval and regulatory clearances, among other closing conditions. It is not yet a completed acquisition.
Key details
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Three forms of consideration: For each Instacart share, holders may elect to receive $65 in cash, 0.3372 shares of DoorDash Class A stock, or $48.75 in cash plus 0.0843 DoorDash shares. Fractional DoorDash shares will be paid in cash.
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Cash is the default, and stock elections are limited: Instacart shares for which holders do not make a valid election will convert to the $65 cash option. The amount of Instacart stock eligible to receive the all-stock option is capped at a level representing 25% of the aggregate consideration DoorDash issues. If elections exceed that limit, they will be prorated, with the excess converted to cash.
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DoorDash may use a different share class: By the earlier of March 31, 2027, or three months before closing, DoorDash may elect to issue its Class C stock instead of Class A stock for the stock portion of the all-stock and mixed options. That alternative requires, among other things, Nasdaq listing approval for the Class C shares and a dividend of at least 0.5 Class C shares for each existing DoorDash Class A and Class B share. If Class C stock trades at a discount to Class A before the deal closes, the exchange ratios must be adjusted under the agreement. DoorDash’s board may also propose a different way to issue the Class C shares, but that would require Instacart’s agreement.
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Approvals and other conditions: Closing depends on Instacart shareholder approval, U.S. antitrust waiting periods and applicable clearances or approvals in Canada and Israel. DoorDash shares issued in the transaction must be approved for Nasdaq listing, and the registration statement covering those shares must become effective. Other conditions include the absence of legal barriers and material breaches or adverse effects as defined in the agreement.
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Timing and termination rights: Either company may generally terminate the agreement if the deal has not closed within 12 months of signing—October 28, 2027—though that deadline can be extended in three-month increments, up to four times, if antitrust conditions remain outstanding and the other closing conditions have been met or waived. The agreement also provides for termination if a final legal prohibition blocks the deal, Instacart shareholders reject it, or either party materially breaches specified obligations.
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Break fee: Instacart must pay DoorDash a $650 million cash termination fee in specified circumstances. These include Instacart ending the agreement to pursue a superior proposal, certain terminations tied to an adverse change in the Instacart board’s recommendation, and certain failed-deal situations involving a publicly known takeover proposal followed by completion of that proposal within 12 months.
Plain-English implications
If completed, the transaction would make Instacart a wholly owned DoorDash subsidiary. The consideration structure gives Instacart shareholders a choice, but the default is cash and the all-stock option is capped. DoorDash’s potential use of Class C stock would add a separate share class to the deal consideration, subject to listing, dividend and exchange-ratio conditions.