You are here
BENTONVILLE, Ark. — Wal-Mart Stores Inc. and Jet.com Inc. have entered into a definitive agreement for Walmart to acquire Jet for approximately $3 billion in cash, a portion of which will be paid for over time. The transaction also includes the payment of $300 million of Walmart shares.
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.
According to Walmart, the acquisition will build on and complement the foundation already in place to serve customers across the Walmart app, site and stores. It also positions the company for even faster e-commerce growth in the future by expanding customer reach and adding new capabilities.
“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,” said Doug McMillon, president and CEO, Wal-Mart Stores Inc. “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.”
The acquisition of Jet will infuse Walmart with ideas and expertise, as well as an attractive brand with proven appeal, especially with millennials, Walmart noted.
In its first year, Jet reached $1 billion in run-rate gross merchandise value, with more than 12 million SKUS offered. Its customer base of urban and millennial customers continues to grow with more than 400,000 new shoppers added monthly, and an average of 25,000 daily processed orders.
Additionally, Jet rewards its 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. It also offers a select group of more than 2,400 retailer and brand partners tailored to create an attractive and distinctive assortment for consumers, the company said.
“We started Jet with the vision of creating a new shopping experience,” Jet.com Inc. co-founder and CEO Mac Lore said. “Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realization 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.”
According to Walmart, the company 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 said it believes it will obtain the necessary regulatory approvals to complete the transaction and both companies intend to make all necessary filings in the near future.
Allen & Co. and J.P. Morgan Securities LLC acted as financial advisors to Walmart on this transaction.