Post by The Big Daddy C-Master on Aug 8, 2016 8:14:11 GMT -5
Looks like they're trying to grow in online sales and compete with the likes of Amazon.
www.investopedia.com/news/walmart-announce-3-bn-jetcom-deal-today-wmt-amzn/?article=1&utm_campaign=www.investopedia.com&utm_source=news-to-use&utm_term=7333972&utm_medium=email
Barring any last minute hiccups, Wal-Mart Stores Inc. (WMT) is expected to announce a $3 billion acquisition of e-commerce company Jet.com on Monday, according to Recode. A deal that was first reported last Wednesday by the Wall Street Journal, values the two-year-old online retailer at more than twice what it was worth in a late-2015 funding round.
Why would Walmart do this? Unlike several other brick-and-mortar retailers whose businesses have been disrupted by Amazon.com Inc. (AMZN), the Bentonville, AR-based Walmart has tons of financial firepower to not only buy time to shore up its in-store operation, it also has the resources to fight on Amazon's own e-commerce turf. (See also, Amazon vs. Big Retail—Investor Optimism is Changing)
But Walmart's online growth, which grew 12% last year (versus Amazon's 25%), has been hard to come by. It posted just 7% growth in its fiscal first quarter. Meanwhile, Jet.com, despite being relatively new to the game (launching last summer), has already shown enough traction to generate $1 billion in annual revenue, making it a worthwhile acquisition.
Jet.com's online portal, which uses an algorithm to adjust prices, would complement Walmart own e-commerce business, which generated some $13.7 billion in revenue in fiscal 2016 (ended in January). Beyond Jet.com's e-commerce businesses itself, Walmart is also buying tons of talent. Jet.com's senior executives, including co-founder and CEO Marc Lore, will be retained and appointed top chief of both Jet.com and Walmart's online business, Recode reports.
It remains to be seen to what extent Jet.com can help Walmart attack Amazon where it hurts. But in the onset, this isn't a deal that's going to keep Amazon CEO Jeff Bezos up at night. If the deal helps distance Walmart from the likes of Target Corp. (TGT) and Best Buy Co., Inc. (BBY), it will have been just as effective.
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www.cnbc.com/2016/08/08/wal-mart-to-by-jetcom-in-3-billion-deal.html
In a bid to juice its online business, Wal-Mart agreed Monday to acquire online retailer Jet.com in a deal valued at about $3.3 billion, one of the largest-ever acquisitions of an e-commerce company.
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 Jet.com provides a curated experience that targets millennials.
Jet's co-founder and CEO Marc Lore will also continue on with the company.
The world's largest retailer said a portion of the $3 billion will be paid over time. Additionally, $300 million of Wal-Mart shares will be paid over time as part of the deal, the company said.
"We believe the acquisition of Jet accelerates our progress across [our] priorities," said Doug McMillon, president and CEO of Wal-Mart Stores. "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."
Although Jet has been operating its site for only a little more than a year, it has already reached $1 billion in run-rate gross merchandise value.
The deal is expected to close this calendar year, subject to regulatory approval.
Up until now, the largest U.S. e-commerce acquisition was QVC's purchase last year of Zulily for $2.4 billion.
www.investopedia.com/news/walmart-announce-3-bn-jetcom-deal-today-wmt-amzn/?article=1&utm_campaign=www.investopedia.com&utm_source=news-to-use&utm_term=7333972&utm_medium=email
Barring any last minute hiccups, Wal-Mart Stores Inc. (WMT) is expected to announce a $3 billion acquisition of e-commerce company Jet.com on Monday, according to Recode. A deal that was first reported last Wednesday by the Wall Street Journal, values the two-year-old online retailer at more than twice what it was worth in a late-2015 funding round.
Why would Walmart do this? Unlike several other brick-and-mortar retailers whose businesses have been disrupted by Amazon.com Inc. (AMZN), the Bentonville, AR-based Walmart has tons of financial firepower to not only buy time to shore up its in-store operation, it also has the resources to fight on Amazon's own e-commerce turf. (See also, Amazon vs. Big Retail—Investor Optimism is Changing)
But Walmart's online growth, which grew 12% last year (versus Amazon's 25%), has been hard to come by. It posted just 7% growth in its fiscal first quarter. Meanwhile, Jet.com, despite being relatively new to the game (launching last summer), has already shown enough traction to generate $1 billion in annual revenue, making it a worthwhile acquisition.
Jet.com's online portal, which uses an algorithm to adjust prices, would complement Walmart own e-commerce business, which generated some $13.7 billion in revenue in fiscal 2016 (ended in January). Beyond Jet.com's e-commerce businesses itself, Walmart is also buying tons of talent. Jet.com's senior executives, including co-founder and CEO Marc Lore, will be retained and appointed top chief of both Jet.com and Walmart's online business, Recode reports.
It remains to be seen to what extent Jet.com can help Walmart attack Amazon where it hurts. But in the onset, this isn't a deal that's going to keep Amazon CEO Jeff Bezos up at night. If the deal helps distance Walmart from the likes of Target Corp. (TGT) and Best Buy Co., Inc. (BBY), it will have been just as effective.
-----------------------------------------
www.cnbc.com/2016/08/08/wal-mart-to-by-jetcom-in-3-billion-deal.html
In a bid to juice its online business, Wal-Mart agreed Monday to acquire online retailer Jet.com in a deal valued at about $3.3 billion, one of the largest-ever acquisitions of an e-commerce company.
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 Jet.com provides a curated experience that targets millennials.
Jet's co-founder and CEO Marc Lore will also continue on with the company.
The world's largest retailer said a portion of the $3 billion will be paid over time. Additionally, $300 million of Wal-Mart shares will be paid over time as part of the deal, the company said.
"We believe the acquisition of Jet accelerates our progress across [our] priorities," said Doug McMillon, president and CEO of Wal-Mart Stores. "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."
Although Jet has been operating its site for only a little more than a year, it has already reached $1 billion in run-rate gross merchandise value.
The deal is expected to close this calendar year, subject to regulatory approval.
Up until now, the largest U.S. e-commerce acquisition was QVC's purchase last year of Zulily for $2.4 billion.
