Wal-Mart purchases Jet.Com for $3.3B to topple Amazon

The multinational retail corporation, Wal-Mart took the biggest step in the history of e-commerce by acquiring Jet.com for a whopping $3B in cash to compete against Amazon. Board of Directors from both parties approved the deal that is expected to close by this year end. Walmart said $3B will be paid in cash and $300 million worth of Walmart shares will be given to Jet.com as a part of transaction.

Jet.com is a popular online-only shopping site, which itself trying to challenge Amazon over few years. But instead the online discount retailer decided to sell itself to the biggest traditional store chain around. For Wal-Mart this would be a great deal as online sales are extremely low in their overall business, last year it was $13.6B in total online revenue. Amazon on the other hand, hit more than $100 billion in the year 2015. Wal-Mart is still behind Amazon in terms of most trafficked online-retail shop in US.

Doug McMillon, President and CEO, Wal-Mart Stores said:

“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. 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.”

Once the acquisition closes, Wal-Mart and Jet will continue to be separate brands, focusing on their own core plans. Walmart’s strategy is to widen the types of customers beyond Walmart’s base, and to expand the companies that it would work to serve those customers. Both will work together bringing more innovative technology and solution to develop other offerings to customers.

Year 2016 marked some of the biggest acquisitions, initially Microsoft acquired LinkedIn for $26B and now Walmart acquiring Jet.com marking another biggest deal of the year.

Lorena used to compete twice in the National Secondary Schools Press Conference. Her love for news writing has not left her veins. As a part of Pabaon News, she exhibits timeliness and clarity.