Key Highlights

● DoorDash agreed to buy Maplebear for $65.00 a share, valuing it near $17 billion.

● At least 75% of the price is cash and up to 25% DoorDash stock.

● A reference price of $57.11 implies a gap of about $7.89, or 13.8%.

● The deal is expected to close between late 2027 and mid-2028.

DoorDash (NASDAQ:DASH) has agreed to buy Instacart (NASDAQ:CART) parent Maplebear for $65.00 a share, valuing the grocery delivery company at about $17 billion in equity, according to a summary of the announcement. At least 75% of the price will be paid in cash and up to 25% in DoorDash stock. The companies expect the deal to close at the end of 2027 or in the first half of 2028.

Instacart shares aren't trading anywhere near $65. One alert on Friday cited a reference price of $57.11, down 2.2%. That's the alert's reference price, not a confirmed pre-market quote. At that level, the gap to the offer is about $7.89 a share, or roughly 13.8%. That figure is a calculation, not a reported number, and ignores the stock component's sensitivity to DoorDash's share price.

Why the spread is so wide

In Merger arbitrage, traders buy the target and collect the difference when the deal closes. The size of the spread reflects the market's view of time, risk and the cost of money. All three point toward a wide gap here.

Time is the biggest factor. With a closing window as late as mid-2028, investors could wait 14 to 20 months for their money. Spread across that period, a 13.8% gross return works out to only a high-single-digit to low-double-digit annual return. That's an estimate that depends on the actual close date. With the 2-year Treasury Yield near 4.60%, a risk-free alternative pays a large part of that.

Regulatory risk is the second factor. A long expected timeline like this one often points to extended antitrust review, though the specific approvals required weren't detailed in the available reports. DoorDash's merger filing was not available, so details such as termination fees or a collar on the stock portion aren't confirmed.

The third Factor is the stock component. Up to a quarter of the payment is in DoorDash shares, so Instacart holders are partly exposed to DoorDash's price. If DoorDash falls, the value of the offer falls with it, unless the agreement includes protections that weren't visible in the reports.

How Wall Street is reacting

Analysts are adjusting. One brokerage downgraded Maplebear to Neutral from Overweight and set a $65 price target, matching the offer, up from $63, according to an alert. That's a typical move when a stock's upside is capped by a fixed deal price. On the buyer's side, another brokerage upgraded DoorDash to Outperform from Neutral and raised its target to $230 from $220, according to one report, whose quote widget showed DoorDash at $179.00, up 5.61%. The timing of that quote wasn't clear.

Media reports that the companies were in talks first surfaced on Oct. 26, putting the value at about $17 billion. That's why some of the deal premium was likely already in the stock before the formal announcement.

For long-term Instacart holders, the trade-off is simple. Selling now gives certainty at a discount. Holding means waiting for $65 while taking on deal-break and DoorDash price risk. A broken deal could send the stock back toward pre-rumor levels.

Watch for the merger proxy and regulatory filings, which should detail the closing conditions. Any early sign of antitrust pushback would widen the spread. A narrowing spread would signal growing confidence that the deal will close. DoorDash's next Earnings report should also give management a chance to explain financing plans, integration costs and how it expects regulators to view the combined grocery and restaurant delivery business.