DoorDash has agreed to buy Instacart in a deal worth about $17 billion, the two companies said on Thursday, bringing the biggest name in restaurant delivery together with the biggest in grocery. The acquisition is expected to close at the end of 2027 or in the first half of 2028.

The transaction will be at least 75% cash and values Instacart at $65.00 per share, a 26% premium over its closing price on 22nd October. DoorDash’s restaurant delivery business would sit alongside Instacart’s grocery partnerships, putting much of a household’s weekly food ordering under one company.

“Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve,” said Chris Rogers, the chief executive of Instacart.

In the joint announcement, the companies said Instacart customers would be able to shop at more than 50,000 additional stores once the deal closes. Members of DashPass and Instacart+, the two firms’ subscription schemes, would pay a single membership fee rather than two.

DoorDash has been building up its grocery arm since the pandemic pushed shoppers out of stores and towards delivery. It has since signed up dozens of grocers, creating a selection that rivals Amazon’s with less infrastructure, chief executive Tony Xu said earlier this year.

Instacart has focused on grocery since it started in 2012. It delivered orders from Whole Foods before Amazon bought the chain in 2017, and now works with thousands of retailers across North America. It also sells retail technology, from digital price tags to smart shopping carts.

The combination sets up a stronger rival to Amazon, which has spent years trying to lift sales in its grocery business, including an expansion of same-day perishable food deliveries across more of the United States over the past year. Uber has grown its restaurant and grocery delivery through Uber Eats, while moving deeper into premium ride-hailing such as black car services and into travel through a hotel-booking partnership with Expedia.

Both DoorDash and Instacart rely on gig workers to pick orders and make deliveries. As independent contractors, most do not receive many of the benefits full-time workers get, such as health insurance or contributions to retirement accounts.