DoorDash is investing $17 billion to acquire Instacart. However, before the transaction is completed, its employees are not even allowed to establish contact with their future colleagues on LinkedIn.
If Instacart employees take the initiative to contact, DoorDash has prepared a response script: "Congratulations! We look forward to establishing contact after the transaction is completed." The company stated that any further communication beyond this requires approval from the legal team.
These guidelines come from an internal Q&A document submitted by DoorDash to the U.S. Securities and Exchange Commission (SEC) on October 29th. On that day, both parties announced the transaction. The document requires employees not to send new LinkedIn friend requests to Instacart employees, nor to accept such requests from them, "even if you previously had a relationship." Throughout the document, the company repeatedly emphasizes that before the transaction is completed, both companies must continue to operate independently.
It may still take some time before this happens. DoorDash expects that the acquisition will be completed by the end of 2027 or in the first half of 2028, but this is subject to obtaining approval from the shareholders of Instacart and passing the anti-monopoly reviews in the United States, Canada, and Israel. This means that LinkedIn's "frozen" status could last up to 20 months.
For DoorDash, the cost is not insignificant. This Fortune 500 company reported revenues of $13.7 billion last year. Calculated at a transaction price of $17 billion, the cost of acquiring Instacart exceeds its annual sales volume.
This restriction reflects legal requirements aimed at preventing what is known as “pre-emptive action” ( gun-jumping ). Antitrust lawyers use this term to describe the improper coordination of operations by companies before a merger is officially completed. The United States Federal Trade Commission ( FTC ) has warned that merging companies must protect competitively sensitive information, including pricing, costs, and business strategies, before the transaction is finalized.
Sharing this information too early or coordinating prices may violate antitrust laws, weaken competition, and even drive up consumer prices before regulatory authorities approve the transaction. Even in the absence of a "race to the market" issue, regulatory authorities can still prevent a merger or acquisition.
In 2024, a federal judge blocked the transaction in which Kroger sought to acquire Albertsons for $24.6 billion, on the grounds that FTC argued that this deal would raise grocery prices. The judge supported FTC's viewpoint regarding competition among shoppers, but dismissed their arguments regarding competition in the labor market. Subsequently, both companies abandoned this transaction.
LinkedIn Prohibitions are not common in mergers and acquisitions.
Restricting contact between employees of the merging parties is not unheard of. In 2018, during the acquisition of Engility by defense contractor SAIC, the company instructed its employees not to contact employees of Engility without approval or coordination from the integration team. Employees who were already working together were allowed to continue doing so.
But several mergers and acquisitions experts told Business Insider, that they have never encountered a restriction that explicitly prohibits LinkedIn from contacting each other during the pending merger period.
LinkedIn claims to have over 1.4 billion members, and nowadays it's easier than ever to see what people are doing and where they work.
For employees facing mergers and acquisitions, these connections may be even more important. The transactions bring up some unsettling questions, such as to whom they will report and whether they will be able to keep their jobs. A review of 190 publications on mergers and acquisitions found that merger announcements can trigger anxiety and prompt employees to actively seek information.
Building relationships with the acquirer can also help employees prepare for what comes next. An article from Morgan Stanley's workplace ( Morgan Stanley at Work ) that quotes an executive Kate Winget suggests that employees can contact people they already know at the acquirer, provided it is appropriate and approved by management.
Why Lawyers Are Worried About Poaching and Mapping Out Organizational Structures
What employees may perceive as networking on social media could be seen by employers as a competitive threat.
Lecturer at Northeastern University, Chris Selland, previously stated that communication among employees can lead to one company poaching staff from another, and may also result in the loss of valuable customer contacts. “This could potentially ruin the entire agreement,” he warned.
Selland also stated to Fortune that this restriction can protect the company from "poaching and organizational structure probing" even if the transaction is ultimately blocked and both parties will still exist as competitors. This Q&A document does not prevent DoorDash employees from applying for Instacart positions, but anyone who does so must apply "in the same manner as other external applicants."
When asked whether DoorDash is overreaching, Selland described this policy as "more of a clearly worded barrier than a strict ban," aimed at preventing employees from inadvertently crossing the lines stipulated in the contract. He mentioned that discussions regarding job vacancies, salaries, or shared accounts could all potentially lead to issues.
However, Selland indicates that 'a single contact via LinkedIn may not cause a transaction to fail.'
The truly more difficult work occurs after the transaction is completed. Last year, Tony Xu, the CEO of DoorDash, spoke on Fortune Brainstorm Tech about their acquisition, which included Finnish company Wolt. He said bluntly, "Mergers and acquisitions are easy to do correctly on paper; but when it comes to actually implementing them, they are extremely difficult."
