- Wal-Mart is to acquire e-tail start-up Jet.com for $3.3 billion in cash and shares
- Jet's proprietary software and experienced management team will give Wal-Mart's online division a much-needed boost
- In the long term, the move may increase competition in the online space but is unlikely to reduce pressure on home entertainment pricing
Wal-Mart is to acquire fledgling e-tailer Jet.com for $3 billion in cash and $300 million in Wal-Mart shares (the latter to be paid over time as part of the deal). Jet, which was founded in 2014, has developed a proprietary, real-time algorithm which identifies the cheapest source of a given product for each order from its network of 2,400 retail and brand partners. The company offers further discounts for bulk buys and claims to offer 12 million products, to be adding more than 400,000 shoppers each month and to be processing an average of 25,000 orders per day.
Both brands will continue to operate distinct services for the time being, but Jet's CEO, Marc Lore, will head up both the Jet brand and Walmart.com. The deal is expected to complete before the end of 2016, subject to regulatory approval.