Hadley Malcolm, USA TODAY 9:22 a.m. EDT August 8, 2016
Walmart's $3 billion acquisition of Jet.com is expected to help the retailer grow its e-commerce business at a faster rate and reach more Millennial customers.(Photo: Danny Johnston, AP)
Walmart will acquire e-commerce start-up Jet.com in a $3 billion cash deal expected to help the world's largest retailer become a powerhouse online shopping destination.
Jet is also set to receive $300 million in Walmart shares paid out over time, according to the terms announced Monday. Walmart said it expects to receive regulatory approval for the deal, which is expected to close this year. Investor reaction was subdued, with Walmart shares ticking up just .65% in pre-market trading.
While the brands will remain separate, Walmart plans to tap Jet's expertise in online ordering to grow its e-commerce business at a faster rate and reach more customers, particularly Millennials.
Jet CEO Marc Lore will remain with the company, though his exact role wasn't disclosed. The deal comes a little more than a year after Lore co-founded the company with Nathan Faust and Mike Hanrahan as a competitor to Amazon and even Walmart itself. Jet aimed to be cheaper than its competitors by using a model that gives customers a bigger discount as more items are added to their basket. Walmart will look into adopting that strategy for its website once the deal is finalized, says Walmart spokesman Dan Toporek.
Jet faced several hiccups in its first year in business. Three months in, it abandoned its initial plan to charge customers a $50-per-year subscription fee to shop with the site, leading to skepticism over whether the company would be able to generate enough profit to stay in business.
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FYI since jet.com has been used by BP members for LEGO purchases.
http://www.usatoday.com/story/money/2016/08/08/walmart-acquires-jetcom-for-3-billion/88386988/
usatoday.com
Walmart to acquire Jet.com for $3 billion
Hadley Malcolm, USA TODAY 9:22 a.m. EDT August 8, 2016
Walmart's $3 billion acquisition of Jet.com is expected to help the retailer grow its e-commerce business at a faster rate and reach more Millennial customers.(Photo: Danny Johnston, AP)
Walmart will acquire e-commerce start-up Jet.com in a $3 billion cash deal expected to help the world's largest retailer become a powerhouse online shopping destination.
Jet is also set to receive $300 million in Walmart shares paid out over time, according to the terms announced Monday. Walmart said it expects to receive regulatory approval for the deal, which is expected to close this year. Investor reaction was subdued, with Walmart shares ticking up just .65% in pre-market trading.
While the brands will remain separate, Walmart plans to tap Jet's expertise in online ordering to grow its e-commerce business at a faster rate and reach more customers, particularly Millennials.
Jet CEO Marc Lore will remain with the company, though his exact role wasn't disclosed. The deal comes a little more than a year after Lore co-founded the company with Nathan Faust and Mike Hanrahan as a competitor to Amazon and even Walmart itself. Jet aimed to be cheaper than its competitors by using a model that gives customers a bigger discount as more items are added to their basket. Walmart will look into adopting that strategy for its website once the deal is finalized, says Walmart spokesman Dan Toporek.
Jet faced several hiccups in its first year in business. Three months in, it abandoned its initial plan to charge customers a $50-per-year subscription fee to shop with the site, leading to skepticism over whether the company would be able to generate enough profit to stay in business.