Walmart Completes Acquisition of Jet.com, Inc.
September 19 2016 - 4:07PM
Business Wire
Wal-Mart Stores, Inc. (NYSE: WMT) today announced completion of
the company’s acquisition of Jet.com, Inc., following expiration of
the waiting period under federal regulations. The news was
initially shared on Instagram by Walmart President and CEO Doug
McMillon.
As previously disclosed, Walmart acquired Jet.com for
approximately $3 billion in cash, a portion of which will be paid
over time, and $300 million of Walmart shares, all of which will be
paid over time. The deal builds on Walmart’s strong e-commerce
foundation and is intended to help accelerate growth and deliver a
seamless shopping experience for customers. Walmart.com and Jet.com
will operate as separate brands, while leveraging technology and
talent across both entities.
“We’re thrilled to welcome the Jet.com team to the Walmart
family and excited to expand the ways we serve our current
customers and reach new customers online,” McMillon said. “Jet
brings a unique approach and technology that puts customers in
control of their experience, helping them find additional ways to
save.”
With the close of the deal, Marc Lore, founder and CEO of
Jet.com, now joins Walmart’s leadership team, serving as executive
vice president at Walmart and president and CEO of Walmart
eCommerce in the U.S. He will lead both Walmart.com and Jet.com,
reporting to McMillon.
“I can’t wait to jump in and get started,” Lore said. “I’ll be
spending a lot of time with the team in the coming weeks and months
focused on scaling Walmart.com and Jet.com, building on our solid
foundations. Together we will be stronger and move even faster to
reimagine the future of shopping.”
Guidance and Other Deal Details:
As originally announced on August 8, approximately $300 million
of Walmart shares will be paid over time as part of the
transaction. As part of this, Lore received restricted stock units
providing for the issuance of 3,554,093 shares of Walmart common
stock par value $0.10 per share, to be paid over a five-year
period. The shares underlying the restricted stock units vest
according to the following schedule, subject to Lore’s continued
employment by Walmart through each vesting date: (1) 10% on the
first anniversary of the closing of Walmart’s acquisition of
Jet.com, Inc.; (2) 1.25% per month for the 12 months between the
first and second anniversaries of the closing; (3) 1.67% per month
for the 12 months between the second and third anniversaries of the
closing; (4) 2.08% per month for the 12 months between the third
and fourth anniversaries of the closing; and (5) 2.5% per month for
the 12 months between the fourth and fifth anniversaries of the
closing. Notwithstanding the requirement that Lore remain employed
to continue to vest in the restricted stock units, if Walmart
terminates Lore’s employment without cause or he resigns for good
reason, Lore will fully vest in any unvested shares of restricted
stock units according to the vesting schedule set forth above.
The award of restricted stock units was granted outside of
Walmart’s 2015 Stock Incentive Plan but, except as provided
otherwise in the award agreement, will generally be subject to the
same terms and conditions as apply to awards of restricted stock
units under that Plan. Walmart’s Board of Directors and its
Compensation, Nominating and Governance Committee approved this
restricted stock unit award in reliance on the employment
inducement exception to shareholder approval provided under Section
303A.08 of the NYSE Listed Company Manual.
Walmart initially estimated a $0.05 dilutive impact to 2017
fiscal year earnings associated with this acquisition, as a result
of the operating losses and one-time transaction costs, assuming
the transaction would close near the beginning of the company’s
fourth quarter. With the close occurring in the middle of the
third quarter, the company expects some marginal dilution above its
initial estimate to 2017 fiscal year earnings.
About Walmart
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world
save money and live better – anytime and anywhere – in retail
stores, online, and through their mobile devices. Each week, nearly
260 million customers and members visit our 11,527 stores under 63
banners in 28 countries and e-commerce websites in 11 countries.
With fiscal year 2016 revenue of $482 billion, Walmart employs more
than 2.3 million associates worldwide. Walmart continues to be a
leader in sustainability, corporate philanthropy and employment
opportunity. Additional information about Walmart can be found by
visiting http://corporate.walmart.com on Facebook at
http://facebook.com/walmart and on Twitter at
http://twitter.com/walmart. Online merchandise sales are available
at http://www.walmart.com and http://www.samsclub.com.
About Jet.com
Jet is among the fastest growing and most innovative e-commerce
companies in the U.S. With best-in-class technology that rewards
customers in real time with savings on items that are bought and
shipped together, Jet reached $1 billion in run-rate Gross
Merchandise Value (GMV) and offered 15 million SKUs in its first
year, relying on a select group of more than 2,400 retailer and
brand partners tailored to create an attractive and distinctive
assortment for consumers. Jet has a growing customer base of urban
and millennial customers with more than 400,000 new shoppers added
monthly and an average of 25,000 daily processed orders.
Forward Looking Statements
The statements in this press release regarding the impact of
this acquisition are believed to be “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended (the “Act”), that are intended to enjoy the
protection of the safe harbor for forward-looking statements
provided by the Act. These forward-looking statements are subject
to certain risks, uncertainties and other factors.
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version on businesswire.com: http://www.businesswire.com/news/home/20160919006488/en/
Wal-Mart Stores, Inc.Investor Relations:Steve Schmitt,
479-258-7172orMedia Relations:Ravi Jariwala,
800-331-0085orRandy Hargrove, 800-331-0085
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