US: Walmart acquires local online retailer for 3.3 billion dollars | Progresiv

Walmart has confirmed it will acquire Jet.com, a US based online retailer, in a deal worth 3.3 billion dollars. Jet.com was co-founded in 2014, by entrepreneur Marc Lore in an attempt to build an online store to compete with Amazon, Walmart and Costco. This acquisition will be the largest ever of an ecommerce company and reflects the commitment Walmart has to growing its ecommerce business. The deal includes 3 billion dollars in cash, plus 300 million dollars in Walmart stock, to be paid out over time as part of an incentive bonus plan for Jet executives. Jet founder and CEO, Marc Lore will continue to run Jet.com, which will remain as a distinct brand alongside Walmart.com, as it aims to continue to provide a unique and differentiated customer experience and curated assortment.

Jet.com has secured over 800 million dollars in financing since its launch, but was likely to require on-going financial support to maintain its growth plans. Access to Walmart's financial backing will allow it to fuel its growth and build on the positive start it has made. For Walmart, the acquisition will build on and complement the foundation already in place through its website, app and stores, and position it for faster ecommerce growth in the future as growth rates have fallen over the last five quarters. The deal will also will expand the customer reach Walmart has and add new capabilities.

With around 14 billion dollars in annual e-commerce sales, Walmart is the second largest US ecommerce retailer, with Amazon in first place achieving sales of around 99 billion. Walmart has said that the combined company will "leverage innovative technology solutions from both companies to develop new offerings to help customers save time and money." It hopes the acquisition will invigorate its operations and help it challenge Amazon and other online retailers. (www.igd.com)