Today, Wal-Mart Stores, Inc. announced that it has entered into a definitive agreement to acquire online retailer Jet for $3 billion in cash.
In addition, $300 million of Walmart shares will be paid over time as part of the transaction.
The purchase highlights Walmart’s drive to boost its online business, “which has been slowing even as it has been making big investments in new distribution centers and expanding services,” according to an article from The Associated Press.
Walmart states that Jet.com will help “build on and complement the foundation the company has in place to serve customers across the Walmart app, site and stores, helping position the company for an even faster e-commerce growth in the future by expanding customer reach and adding new capabilities.”
“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,” says Doug McMillon, president and CEO of Wal-Mart Stores, Inc. “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.”
The purchase is expected to close this year upon regulatory approval, Walmart says.
Jet.com launched in July 2015 under Marc Lore, co-founder and CEO. Currently, the website sells 12 million products from more than 2,400 retailers.
The site uses a real-time pricing algorithm to determine which sellers are most efficient in value and shipping and adjusts prices based on items in a consumer’s cart, as well as how far the products are from the shopper’s home, according to The Associated Press article.
“We started Jet with the vision of creating a new shopping experience,” Lore says. “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.”
Both the Walmart and Jet brands will remain separate, with Walmart.com focusing on the company’s everyday low price strategy and Jet continuing to provide a unique and differentiated customer experience with curated product assortments.