The acquisition of Jet.com by Walmart is official. Walmart’s PR release:
Wal-Mart Stores, Inc. and Jet.com, Inc. today announced 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. Additionally, $300 million of Walmart shares will be paid over time as part of the transaction.
Walmart put forth some numbers on why Jet.com is a good fit in the companies eyes:
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.
The following paragraph unintentionally shows off the missing complementarity between the two price focused businesses:
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 and Jet will leverage innovative technology solutions from both companies to develop new offerings to help customers save time and money.
Time will tell how the marriage between Jet.com and Walmart will fare. The WSJ on Jet CEO Marc Lore’s new position at Walmart
Mr. Lore will take on a senior leadership position on the e-commerce side of Wal-Mart following the transaction, a person familiar with the situation said. Wal-Mart’s top online executive, Neil Ashe, is expected to depart, this person said.
With Walmart.com and Jet.com as siblings having to share executives between them, maybe there is now room for Jet.com to become something more than a discount shop?
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