BENTONVILLE, AR: August 8, 2016. Wal-Mart is to acquire e-commerce company Jet.com in exchange for US$3 billion in cash and US$300 million in Wal-Mart stock. The deal is expected to close later this year subject to regulatory approval.
Jet was co-founded in 2014 by current CEO Marc Lore, CTO Mike Hanrahan and COO Nate Faust. Previously the three men co-founded Quidsi, the parent company of e-commerce sites Diapers.com, Soap.com and Wag.com that was sold in 2010 to Amazon for US$545 million.
"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," observed Doug McMillon, Wal-Mart president and CEO.
"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," he added.
The tie-up will see Walmart.com focus on delivering its low price strategy while Jet will continue to provide a differentiated experience and customer rewards on items that are bought and shipped together to reduce supply-chain and logistics costs.
"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. 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," he declared.
The Jet acquisition follows Wal-Mart's tie-up in June with China e-commerce company JD.com that serves 600 million consumers in 2,493 counties and districts across China via seven fulfillment centers, 209 warehouses and 5,987 pick up & delivery stations.
For Walmart the alliance provides new traffic for its stores from JD.com via the company's extensive same-day delivery network. Meanwhile JD.com will leverage Wal-Mart's online grocery platform Yihaodian in eastern and southern China to complement its own geographical and product strengths. In addition, JD.com's customers will gain access to a wide range of new and imported items from Walmart and Sam's Club.
The deal, which includes Wal-Mart acquiring five percent of JD.com stock, will see the two companies grow the Yihaodian brand and business under its current name and market position.
"We're excited about teaming up with such a strong leader in JD.com, and the potential that this new relationship creates for customers in China, as well as for our businesses. It also has a very complementary business and is an ideal partner that will help us offer compelling new experiences that can reach significantly more customers," said McMillon.
Noting Wal-Mart is synonymous with "trusted-quality efficient retailing", JD.com CEO Richard Liu said the tie-up would increase both product selection and overall user experience as well as leverage his company's "unparalleled logistics capabilities".