Wal-Mart Stores Inc. and Jet.com Inc. announced Monday they have entered into a definitive agreement for Walmart to acquire Jet for approximately $3 billion in cash, a portion of which will be paid over time, according to a Walmart news release.
Additionally, $300 million of Walmart shares will be paid over time as part of the transaction.
The acquisition, which is subject to regulatory approval, has been approved by the boards of directors for both companies and is expected to close this calendar year.
“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,” Walmart president and CEO Doug McMillon said in the release. “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.”
Led by co-founder and CEO Marc Lore, Jet is among the fastest growing and most innovative e-commerce companies in the U.S. Among other things, Lore previously co-founded and led Quidsi, the parent company of e-commerce sites Diapers.com, Soap.com and Wag.com. With the help of co-founders Nate Faust and Mike Hanrahan, Lore grew Quidsi into a prominent and successful business that was ultimately sold.
Among other things, Jet has:
• Demonstrated ability to scale with speed, reaching $1 billion in run-rate Gross Merchandise Value (GMV) and offering 12 million SKUs in its first year.
• A growing customer base of urban and millennial customers with more than 400,000 new shoppers added monthly and an average of 25,000 daily processed orders.
• Best-in-class technology that rewards customers in real time with savings on items that are bought and shipped together, thereby reducing the supply-chain and logistics costs often buried in the price of goods.
• A select group of more than 2,400 retailer and brand partners tailored to create an attractive and distinctive assortment for consumers.
“We started Jet with the vision of creating a new shopping experience,” Lore said. “Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision.”
Walmart and Jet will maintain distinct brands, with Walmart.com focusing on delivering the company’s Everyday Low Price strategy, while Jet will continue to provide a unique and differentiated customer experience with curated assortment.
Walmart will release its second quarter earnings on Thursday, Aug. 18.