DoorDash's $17B Instacart Buy Faces FTC Scrutiny as Grocery Delivery Consolidates

DoorDash announced Thursday it is acquiring Instacart in a $17 billion deal that combines the two largest grocery delivery platforms in the US, a transaction that is likely to draw scrutiny from the Federal Trade Commission, which has focused on affordability as the cost of living remains a persistent source of pain for US consumers.

The deal — at least 75% cash, mostly financed by borrowing — values Instacart at $65 a share, a 26% premium over the closing price on Oct. 22, the last trading session before news outlets reported on the talks, according to the companies. Instacart's board has unanimously approved the acquisition. Both companies are headquartered in San Francisco.

Shares of Instacart slumped 1.3% by about 10:25 a.m. ET, while DoorDash jumped 5.8%.

Regulatory Hurdles

The FTC, which traditionally handles the review of retail and grocery-related mergers, has been homing in on pocketbook issues and has a track record of scrutinizing delivery apps' business practices. The agency has an ongoing case against Uber over subscription practices and is considering a rule to prohibit food delivery services from charging surprise fees.

Last year, the FTC said it was looking into Instacart's practice of running price experiments that a study found resulted in some shoppers paying more than others for the same items ordered from the same store at the same time. Instacart ended the practice following criticism after the study by Consumer Reports and Groundwork Collaborative, an economic think tank.

Regulatory hurdles are the biggest wildcard for the deal, which would give DoorDash a shortcut into the grocery business it has long tried to build, said Zak Stambor, retail and ecommerce analyst at Emarketer.

"There is meaningful overlap between the companies, especially in grocery delivery, so a deal would almost certainly draw antitrust scrutiny," he said.

Still, DoorDash is not a new face in Washington. It supported President Donald Trump's plan to exempt taxes on tips and delivered food to the White House earlier this year to highlight how the policy had saved its drivers money.

The Trump administration has already greenlit several massive mergers, including Paramount Skydance's $111 billion acquisition of Warner Bros. Discovery and Nippon Steel's near-$15 billion deal with US Steel, according to the New York Post. Analysts at Wedbush Securities said they expect US regulators will approve the tie-up.

But some grocery chains who work with both Instacart and DoorDash might oppose a merger, potentially inciting pushback from state attorneys general even if national regulators pass through the deal, the Post reported. New York City Mayor Zohran Mamdani signaled he is preparing to fight the merger, writing on X Thursday: "Corporate consolidation means higher prices, harsher exploitation, and greater economic inequality for New Yorkers. We've stood up to these giants before. That doesn't stop now."

Market Position

Among standalone delivery apps, Instacart competes with DoorDash and Uber Eats, which have both expanded into grocery. The apps dispatch drivers to shop directly at stores including Kroger and Albertsons.

Last year, DoorDash had 65.1% of all orders, including retail, grocery and restaurant delivery, according to statistics YipitData provided to Reuters. Uber Eats had 25.8% and Instacart 9.1% of orders, according to YipitData's analysis of more than 3 million consumers' email receipts.

DoorDash has touted its lead on grocery and retail, saying in February that it had more of those orders in 2025 than other food delivery apps, citing analysis by YipitData.

But DoorDash could argue it also competes with Walmart, Amazon.com and Target, and smaller operator Gopuff, all of which offer same-day delivery on groceries from their own stores and warehouses. Walmart accounted for nearly 32% of all online grocery sales in 2025, while Amazon generated about 23%, according to research firm eMarketer.

The deal could give DoorDash an estimated 88% share of third-party online grocery marketplaces, accounting for roughly 23% of all online grocery sales in the US, according to estimates from research firm Bernstein.

Deal Details

The Instacart brand and app will be preserved, granting Instacart customers access to 50,000 additional storefronts served by DoorDash. The merger will also combine DashPass and Instacart+ subscriptions into a single membership, saving members an estimated $100 million annually, according to the companies.

DoorDash Chief Executive Tony Xu stated the acquisition combines Instacart's grocery specialization with DoorDash's delivery infrastructure and logistics.

"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," Xu said in a statement. "Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery."

The acquisition is expected to close at the end of 2027 or the first half of 2028.

The takeover comes as Instacart's annual revenue has been slowing amid stiff competition from Amazon and Walmart, both of which have expanded their same-day and next-day grocery delivery options. Instacart's annual revenue grew just 11% in 2025. In the third quarter, sales jumped 17%, the company said Thursday. It also handled 90.3 million orders worth about $10.4 billion, generating about $1 billion in revenue.

DoorDash on Thursday reported 993 million orders in the third quarter, up 28% from the same period last year as customers shelled out nearly $34 billion. It generated revenue of $4.6 billion.

Data Concerns

The combined companies would share an enormous amount of data on Americans' shopping habits. Groundwork Collaborative President Lindsay Owens criticized the deal, saying it "would be obviously illegal and consolidate an alarming amount of surveillance and pricing technology in one company."

Gathering and analyzing shoppers' data to inform pricing and advertising strategies has become a lucrative line of business for many companies. The FTC on Wednesday launched a study of whether and how companies including DoorDash and Instacart use individual shoppers' data to set prices and wages for drivers.

Prior Deal History

This isn't the first time DoorDash has pursued Instacart. In 2021, the company eyed a deal that would have valued Instacart at more than $40 billion, but the merger was sidelined over concerns it would face regulatory challenges from the Biden administration, according to The Information, as reported by the New York Post.

Executives at Instacart also discussed a possible sale to Uber in late August, the idea being that the deal could secure regulatory approvals by arguing that both Amazon and Walmart are still larger than a combined company, the outlet reported. But Uber wasn't eager for another acquisition, fearful of regulatory challenges after purchasing German service Delivery Hero for $15 billion this summer. After talks with Uber fell apart in September, Instacart turned to DoorDash.

DoorDash has been considering an acquisition of Instacart for years and did not want to miss a window to close a deal under the Trump administration, which it views as friendlier to mega-mergers, sources told The Information, as reported by the Post.

DoorDash is arguing the deal would be better for local businesses, saying DoorDash and Instacart partner with brick-and-mortar grocery stores instead of owning their own grocery fulfillment centers like e-commerce competitors — an apparent reference to Amazon and Walmart.

Questions remain regarding how the merger will affect existing commercial ties, such as Instacart's current delivery partnership with Walmart, the Independent reported.