Three days after The Wall Street Journal reported that DoorDash was in advanced talks to acquire Instacart, the companies announced a cash-and-stock deal early Thursday that values Instacart at about $17 billion. The takeover deal would expand DoorDash's delivery network and strengthen its fight against Amazon and Walmart in the online delivery battle.
A news release published by DoorDash outlined the deal terms, including a $65-a-share offer, a 26% premium to Instacart's closing price last Thursday.
"The aggregate transaction consideration will be at least 75% cash, with Instacart stockholders able to elect cash, DoorDash stock, or a combination of both, subject to proration so that DoorDash stock does not exceed 25% of the aggregate consideration. Instacart's board of directors has unanimously approved the agreement," the news release stated.
For DoorDash, which is already a top restaurant delivery app across the US, the Instacart deal would significantly boost its grocery delivery operations.
CEO Tony Xu described the opportunity:
"Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you'd choose yourself, and get the ice cream to you before it melts.
"Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day.
"Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery. It's still early innings, but we know that when more people shop local, more dollars stay local." READ MORE AT SOURCE »
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