NEW YORK: Wal-Mart Stores announced on Monday that it will acquire e-commerce company Jet.com for $3.3 billion as it beefs up its online retail operations in response to Amazon and other companies.
Wal-Mart is paying $3bn in cash for the online retailer. Shareholders of Jet.com, which was launched in July 2015, will also receive $300 million in Wal-Mart shares, Wal-Mart said.
Wal-Mart said the shares would be paid to Jet.com “over time,” along with a portion of the cash.
“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,” said Wal-Mart chief executive Doug McMillon.
Wal-Mart praised Jet.com’s leaders, including chief executive Marc Lore, whose previous company owned the e-commerce site Diapers.com., which was sold to Amazon in 2010.
Wal-Mart plans to keep Jet.com as a distinct brand.
“The acquisition of Jet will infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with Millennials, the first generation of true digital natives,” Wal-Mart said.
The transaction comes as Wal-Mart attempts to keep pace with fast-growing Amazon, which has surpassed Wal-Mart in market capitalisation even as its sales lag those of the conventional retailer.
Wal-Mart shares rose 0.6 per cent to $74.21 in pre-market trade.