Wal-Mart, one of the largest retailers in US, said that it will acquire Jet.com for $3.3bn as it looks to boost its ecommerce operations.
The acquisition received approval from the boards of both companies and awaits regulatory approval. The deal is expected to be closed by the end of this year.
As per the agreement, the deal will be paid in cash, a portion of which will be paid over time and $300m worth of Wal-Mart shares will also be paid over time.
Wal-Mart says that this acquisition will compliment its business and also add to the already established infrastructure of Wal-Mart’s app, site and stores and can place the company on fast tracks in e-commerce growth.
According to Wal-Mart, Jet.com, established by Marc Lore, Mike Hanrahan and Nate Faust, has become one of the fastest growing e-commerce companies in the US.
The retail giant is confident that the acquisition can bring onboard new ideas, expertise, innovation and an attractive brand with proven appeal.
Wal-Mart Stores president and CEO Doug McMillon said: “We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want. We believe the acquisition of Jet accelerates our progress across these priorities.
“Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”
Wal-Mart said that Jet.com could add in as many as 400,000 new customers every month, could reach $1bn in run-rate gross merchandise value (GMW) and offer 12 million SKUs in the first year.
Processes an average of 25,000 orders on a daily basis and has in place a reward system which offers savings for items that are bought and shipped together, which saves time and cost on supply-chain and logistics.
Lore said: “We started Jet with the vision of creating a new shopping experience. Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realisation of that vision.
“The combination of Walmart’s retail expertise, purchasing scale, sourcing capabilities, distribution footprint, and digital assets – together with the team, technology and business we have built here at Jet – will allow us to deliver more value to customers.”
