DoorDash announced on Thursday that it has agreed to acquire rival Instacart for $17 billion. The acquisition would bring two major players in on-demand delivery under one roof, combining DoorDash’s dominance in restaurant takeout with Instacart’s reach in grocery delivery.

DoorDash will buy Instacart for a total value of $65 for each Instacart share, the company said. The deal has been approved by the boards of both companies.

“Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more,” said Instacart CEO Chris Rogers in a press release.

“When our purpose-built grocery technology and trusted retailer and brand relationships are combined with DoorDash’s global consumer reach and logistics capabilities, we can create new opportunities for our retail and brand partners, offer an even better experience for customers and shoppers, and deliver compelling value for our shareholders.”

DoorDash plans to keep Instacart’s brand, enterprise technology products, and app. The company also notes that the two brands will continue to operate as separate and independent companies until the transaction closes.

DoorDash says the deal could help more grocers build out their own online ordering platforms and advertising businesses using Instacart’s technology, while grocers could also use DoorDash’s fulfillment services to handle more online orders and offer lower-cost delivery.

“Grocery is one of the hardest things to get right online,” DoorDash CEO Tony Xu said in the press release.

“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,” said Xu.

Instacart currently has a market cap of more than $13 billion, and its stock price is up 25% for the year to date. The company likely viewed this as an opportune time to sell at a desirable price, ahead of intensifying competition in the grocery delivery market.

Bloomberg previously reported that Instacart was in talks with Uber, but that the company had walked away from discussions.

The deal is expected to close toward the end of 2027 or in the first half of 2028.