DoorDash agrees to purchase Instacart for $17 billion

DoorDash has agreed to purchase Instacart for a staggering $17 billion, marking one of the largest acquisitions in recent history. However, despite this massive deal, DoorDash employees are being instructed not to connect with their future colleagues on LinkedIn.

According to an internal Q&A document filed by DoorDash with the SEC, employees should refrain from sending new connection requests or accepting requests from Instacart workers, even if they have a prior relationship. The company has provided a scripted response for when Instacart employees reach out: "Congrats! Looking forward to connecting after the deal closes." Any further communication requires approval from DoorDash's legal team.

The acquisition is subject to various conditions, including shareholder approval and antitrust reviews in several countries. DoorDash expects the deal to close by the end of 2027 or in early 2028, which could mean that the LinkedIn freeze remains in place for up to 20 months.

The $17 billion price tag for Instacart is a significant investment for DoorDash, a Fortune 500 company with $13.7 billion in revenue last year. This massive deal costs more than a full year of DoorDash's sales and underscores the stakes involved in the acquisition.

As part of its $17 billion acquisition deal, DoorDash has implemented a restrictive policy to prevent employees from adding Instacart staff on professional networking site LinkedIn. This measure is designed to comply with antitrust regulations that prohibit merging companies from sharing competitively sensitive information before the deal is finalized.

Antitrust lawyers refer to this practice as "gun-jumping, where companies begin coordinating their operations prematurely, potentially reducing competition and leading to higher prices for consumers. The Federal Trade Commission has warned that merging companies must safeguard sensitive information, including pricing strategies and business plans, until a merger is officially approved.

In recent years, regulators have demonstrated their willingness to block mergers deemed anticompetitive. A notable example was the 2024 federal court ruling that blocked Kroger's $24.6 billion acquisition of Albertsons, citing concerns over grocery prices but rejecting arguments about worker competition. The deal ultimately fell through as a result.

DoorDash's policy restricting LinkedIn connections between employees is not unprecedented in M&A transactions. In fact, defense contractor SAIC imposed similar restrictions when it acquired Engility in 2018, requiring clearance for employee contact and coordination through an integration team. However, experts in mergers and acquisitions say they have never seen a restriction specifically targeting professional networking site connections during a pending merger.

As news of the potential merger between DoorDash and Instacart spreads, employees are likely to be thinking about their futures and how they can navigate the transition.

One way for them to prepare is by building relationships with people from the acquiring company. This can involve reaching out to colleagues or managers at DoorDash to get a sense of what the integration process will look like and what opportunities may arise.

However, any attempts to make connections on professional networking sites are being restricted. According to reports, employees of DoorDash are not allowed to add Instacart staff to their LinkedIn connections during this time.

This restriction is seen by some experts as a way for companies to protect themselves against potential poaching and org-chart mapping in case the deal is ultimately blocked. By limiting employee interactions with each other, they can prevent one company from recruiting workers from the other and potentially gaining valuable customer contacts.

The Q&A process doesn't stop employees from applying for jobs at Instacart, but anyone who does would need to go through the same application process as external applicants.

DoorDash's approach to acquisitions has been described as a clearly-worded guardrail" by an executive, intended to prevent employees from inadvertently crossing contractual lines when discussing job openings or other sensitive topics.

The integration process after closing is considered the more challenging aspect of mergers and acquisitions, according to DoorDash CEO Tony Xu, who emphasized that getting it right in practice can be much harder than making it look good on paper.