Wal-Mart has agreed to buy fast-growing online retail newcomer Jet.com, which had launched with a splash a year ago when it announced its intention to challenge online leader Amazon.
Wal-Mart is paying $3 billion in cash and another $300 million in stock.
The deal announced Monday marks a major move for Wal-Mart, which is realizing that it needs to compete more aggressively in the online world. Wal-Mart’s online business has been slowing even as it has been making big investments in new distribution centers and expanding services.
Last month, Wal-Mart announced that was selling its Chinese online business Yihaodian.com to the China’s second-biggest e-commerce site JD.com in a strategic partnership that it hopes will bolster its presence in the lucrative but increasingly competitive marketplace.
Buying Jet.com would let Wal-Mart compete more effectively with Amazon.com and other online retailers. The deal also reflects the difficulties for startups like Jet.com to make it on their own in a sphere dominated by Amazon.com with its network of distribution hubs and the powerful asset of its Prime membership program.
The acquisition is expected to close this year upon regulatory approval, Wal-Mart said.
(Source: Chicago Tribune)