A part of the mentioned amount will be paid by Wal-Mart over time.
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So far as the financial terms of the Jet.com acquisition are concerned, Wal-Mart has revealed that it will pay approximately $3 billion in cash and $300 million in shares for the startup.
“Wal-Mart Stores, and Jet.com today announced they have entered into a definitive agreement for Walmart to acquire Jet for approximately Dollars 3 billion in cash, a portion of which will be paid over time”.
Walmart said its acquisition of Jet will “build on and complement the significant foundation already in place to serve customers across the Walmart app, site and stores and position the company for even faster e-commerce growth in the future by expanding customer reach and adding new capabilities”. “We believe the acquisition of Jet accelerates our progress across these priorities”.
More interestingly, Marc Lore, the CEO and co-founder of Jet, will now handle both Jet and Walmart’s online operations, taking over from incumbent Neil Ashe.
The purchase, and a shuffling in the executive ranks that comes with it, are Wal-Mart’s clearest acknowledgments yet that its online strategy is not working. Jet’s software is expected to be integrated into Walmart.com after the conclusion of the deal. The company first launched Walmart.com more than 15 years ago. “Last year it poured a staggering $10.5 billion into information technology, more than any other company on the planet”, the publication added, citing data from IDC. Wal-Mart has opened seven large distribution centers across the USA and hired hundreds of e-commerce staffers. Wal-Mart also started an annual subscription service similar to Amazon Prime, but costing half the price.
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Previously, Lore has worked for Amazon.com, the market leader in online retail sector and a rival that Walmart has been trying to close the gap with. Wal-Mart reports that Jet has been adding 400,000 shoppers monthly. Jet’s website processes an average of 25,000 orders a day. Walmart.com and Jet.com will continue to operate as distinct brands, with Jet keeping its focus on “a unique and differentiated customer experience with curated assortment”, according to today’s announcement.
