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Walmart confirms Jet.com acquisition in $3.3 billion cash and stock deal

By Jos
Aug 8, 2016
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  1. Walmart has been making a series of moves to boost online sales and better take on Amazon. Today the company is making another big bet towards that path by confirming it will be buying Jet.com, online-only shopping site that has been live for a little over a year, for $3 billion in cash plus up to $300 million in shares for Jet founders.

    The deal is expected to close towards the end of the year, subject to regulatory approval, making this one of the largest-ever acquisitions of an e-commerce company.

    Jet’s founder Marc Lore will reportedly lead Walmart’s e-commerce operations after the deal closes, replacing Neil Ashe after a transitional period. Lore previously co-founded Diapers.com’s parent company and sold it to Amazon for $550 million in 2011.

    Walmart currently has 11,527 stores in 28 countries with a total annual revenue of $482 billion and $15 billion in profits last year. E-commerce represents just a drop in the bucket with $14 billion in annual e-commerce sales, a far cry from Amazon’s roughly $100 billion, and its growth rate has reportedly decelerated for five consecutive quarters.

    With the acquisition of Jet.com the retail giant hopes to reinvigorate online sales. Wal-Mart and Jet plan to maintain distinct brands, with Wal-Mart's website continuing to focus on emphasizing the company's "everyday low price" strategy.

    While still not profitable and burning through advertising money at a rate of $20 million to $25 million per month to fund its growth, Jet has been adding more than 400,000 new shoppers each month and processes an average of 25,000 orders daily. The site sells more than 12 million products through its own warehouses and a network of third-party sellers.

    Aside from acquiring a growing e-commerce operation, Walmart is also interested in Jet’s back end technology, which can identify in real time which orders should be routed to which vendors to get the lowest fulfillment and shipping costs and pass some of that savings to customers.

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  2. Evernessince

    Evernessince TS Evangelist Posts: 1,201   +595

    I thought this would be a good move until they stated they were going to keep both the Jet and walmart storefronts. What's the point of acquiring a company if you aren't going to use them to your advantage. The Jet marketplace is better than Walmart's, better to start with the stronger foundation.
     
  3. p51d007

    p51d007 TS Evangelist Posts: 914   +391

    Hopefully they fix that laser on the TV ad that makes it shrink people's faces, ears, shirts LOL.
     
  4. pouljuhl

    pouljuhl TS Rookie

    If they decided to take this step, so that they know what they are doing. and I think that they can't lose.)
     
  5. Uncle Al

    Uncle Al TS Evangelist Posts: 1,682   +787

    Wow .... my comment got cut and it wasn't the slightest bit offensive! Hope Walmart isn't as thin skinned!
     
  6. EClyde

    EClyde TS Guru Posts: 710   +183

    I been using Wal-Mart a great deal for staple purchases. Free shipping just not two days but who cares? It's only paper towels and the like. The packing isn't so good so I need to watch that I don't put animal crackers in the shipment with kitty litter. BTW the boxes Wal-Mart uses are premium heavy duty. I have kept several to store kindling in
     

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