Walmart to buy in $3.3 billion deal

In a bid to juice its online business, Wal-Mart agreed Monday to acquire online retailer in a deal valued at about $3.3 billion, one of the largest-ever acquisitions of an e-commerce 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, which is expected to close this year, subject to regulatory approval.

After the close, 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 provides a curated experience that targets millennials.

Jet’s co-founder and CEO Marc Lore will join Wal-Mart, bringing his vast e-commerce experience as a co-founder of Quidsi, the parent of, which was sold to Amazon.

Tapping an outsider is a shift for Wal-Mart, which has grown its online business to become the second largest etailer behind Amazon through internal investment. But growth at Wal-Mart’s online business has been sluggish of late and online sales have never been more important for retailers.

Moody’s analyst Charlie O’Shea expects the impact of the deal to be “benign” on Amazon, but sees it as sign that Wal-Mart is taking its online operations seriously.

“This acquisition, in tandem with its joint-venture in China with, demonstrates that Walmart is attacking online retail with significant zeal,” O’Shea said. “As we believe ‘catching’ Amazon online is an unrealistic goal for any brick-and-mortar retailer, Walmart now has a definite leg-up on its competitors in the very important race to be number 2 online.”

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, and boasts a growing customer base of urban and millennial customers. The site says it has been adding more than 400,000 new shoppers each month and processes an average of 25,000 orders daily.

An attempt to dethrone Amazon, Jet uses an algorithm that it promises will deliver lower prices. Customers can save by buying in bulk from the site, or by foregoing the chance to make a return.

“We believe the acquisition of Jet accelerates our progress across [our] priorities,” said Doug McMillon, president and CEO of Wal-Mart Stores. “ 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.”

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