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Walmart to Acquire for $3B

Wal-Mart Stores Inc. will acquire for $3 billion in cash, along with $300 million of the Bentonville, Ark.-based retailer's shares, both of which will be paid over time as part of the transaction. The acquisition, which is subject to regulatory approval, is expected to close by the end of the year.

Walmart said the deal "will build on and complement the significant foundation already in place to serve customers across the Walmart app, site and stores, and position the company for even faster e-commerce growth in the future by expanding customer reach and adding new capabilities."

Noting that the company is "looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience," Doug McMillon, Wal-Mart Stores' president and CEO, said the retailer believes the deal with the Hoboken, N.J.-based Jet will accelerate its progress across the trio of top priorities. " 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.”

Jet Co-founder/CEO Marc Lore to Play Key Role

Following the deal’s closure, Jet co-founder and CEO Marc Lore will head the retailer’s online division for several years – longer than his two-plus years at Amazon – to help combine Jet’s proprietary technology, customer data and e-commerce expertise, with Walmart’s extensive supplier relationships and $480 billion revenue stream to help fight Amazon.

“We started Jet with the vision of creating a new shopping experience,” said Lore. "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.”

The news comes shortly after the Bentonville, Ark.-based mass merchandiser said it plans to invest $2 billion into its two-day subscription-based shipping service, ShippingPass, which is similar to Amazon’s Prime two-day shipping service, charging half of Prime’s annual fee, though offering fewer amenities. It also comes after Walmart has taken several swipes at the e-commerce giant, the most recent taking place during Amazon’s biggest day of the year, Prime Day, which offers deals similar to those of Black Friday. Walmart offered a similar promotion to Prime Day’s free 30-day Prime membership while featuring similar product deals as those Amazon offered during this year’s Prime Day, which took place July 12.

Walmart and Jet will maintain distinct brands, with focusing on delivering the company’s EDLP strategy, while Jet will continue to provide what it describes is its "unique and differentiated customer experience with curated assortment."

In his new role, Lore will continue to work closely with fellow co-founders Mike Hanrahan and Nate Faust. Among other ventures, Lore previously co-founded and led Quidsi, the parent company of e-commerce sites, and Faust and Hanrahan helped Lore grow Quidsi into a prominent and successful business that was ultimately sold.

Lore said the acquisition of Jet "will infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with Millennials, the first generation of true digital natives."

Walmart, which will release its second quarter earnings on Thursday, Aug. 18, 2016, expects to obtain the necessary regulatory approvals to complete the transaction. In the interim, both companies will make all necessary legal and regulatory filings to complete the transaction in the near future.

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