DoorDash (NASDAQ: DASH) stock rose 0.43% in premarket trading on Tuesday following reports that the company is in advanced talks to acquire grocery-delivery rival Instacart (NASDAQ: CART) in a potential $17 billion transaction.
The Wall Street Journal reported Monday, citing people familiar with the matter, that the companies could reach an agreement as soon as this week. Reuters subsequently reported that the companies could finalize a deal as early as Wednesday, although negotiations could still fall apart.
The reported $17 billion valuation would be approximately 42% higher than Instacart’s estimated $12 billion market capitalization before reports of a possible sale emerged last Friday.
Semafor reported that DoorDash was negotiating exclusively with Instacart, while Reuters said Instacart’s earlier discussions with Uber Technologies were no longer active.
Neither company had announced a definitive agreement, and the payment terms of the proposed transaction remained undisclosed.
DoorDash Shares Fall 9.4% Across Two Sessions
DoorDash closed Monday at $168.44, down 6.10%, following a 3.53% decline on Friday. The two consecutive losses left the stock 9.4% below its October 22 close of $185.94.
Trading volume reached 7.9 million shares on Monday, up from 2.7 million shares on Friday.
Instacart shares moved in the opposite direction, gaining 7.87% on Monday to close at $60.88 after advancing 9.21% on Friday, when reports of preliminary acquisition discussions first emerged.
Meanwhile, DoorDash Tokenized Stock (DASHon) was trading at $167.76, down 5.78% over the past 24 hours, according to CoinMarketCap. The tokenized instrument trades separately from DoorDash’s Nasdaq-listed shares. Therefore, its 24-hour performance is not directly comparable to the stock’s premarket movement.
Instacart’s Retail Network and Earlier Buyout Talks
A potential acquisition would combine DoorDash’s restaurant, grocery, and retail delivery network with Instacart’s grocery marketplace, retailer technology services, and advertising operations.
Instacart works with more than 2,200 retail banners representing nearly 100,000 stores, according to the company’s disclosures.
The companies previously held talks in 2021 about a potential deal that could have valued Instacart at between $40 billion and $50 billion, according to The Information. Those negotiations ended partly because of concerns about obtaining antitrust approval.
The valuation under discussion now is substantially below that earlier range. Instacart has since gone public, completing its initial public offering in September 2023.