DoorDash announced on Thursday that it has agreed to acquire its competitor Instacart for $17 billion. This acquisition will bring together two important players in the on-demand delivery sector, combining DoorDash's dominant position in the restaurant takeaway industry with Instacart's coverage in fresh food delivery.

DoorDash indicates that Instacart will be acquired for a total value of $65 per share. The boards of directors of both parties have approved this transaction.

Instacart CEO Chris Rogers stated in a press release: "Over the past 14 years, Instacart has transformed online fresh food shopping by helping retailers of all sizes to compete and grow. Working together with DoorDash will enable us to do even more."

"When the technology we have developed specifically for fresh products, along with our trusted relationships with retailers and brands, are combined with DoorDash's global consumer reach and logistics capabilities, we can create new opportunities for retail and brand partners, provide a better experience for customers and shoppers, and bring significant value to shareholders."

DoorDash plans to retain the brands, enterprise technology products, and applications of Instacart. The company also stated that before the transaction is completed, these two brands will continue to operate as independent companies.

DoorDash indicates that this transaction may help more grocers utilize Instacart's technology to build their own online ordering platforms and advertising businesses; at the same time, grocers can also use DoorDash's fulfillment services to handle more online orders and provide lower-cost delivery.

DoorDash CEO Tony Xu stated in a press release: "Fresh food delivery is one of the most challenging aspects to execute well online."

"You have to pick ripe avocados, find alternatives that you would choose yourself, and deliver them to your hands before the ice cream melts. Instacart has been learning how to do this well for grocers for many years, while DoorDash has established a delivery network and technology that local businesses rely on every day. Together, we can provide more tools for stores of all sizes and unleash the potential of fresh food delivery. We're still in the early stages, but we know that when more people buy local products, more money will stay in the community," said Xu.

Instacart currently has a market value of over $13 billion, and its stock price has risen by 25% so far this year. The company is likely to believe that now is an appropriate time to sell at an ideal price before the competition in the fresh food delivery market intensifies.

Bloomberg previously reported that Instacart had negotiated with Uber, but later withdrew from the discussions.

The transaction is expected to be completed by the end of 2027 or in the first half of 2028.