Wal-Mart Stores Inc. has completed the acquisition of internet retailer Jet.com, paying US$3 billion for the e-commerce startup.
Chief executive Doug McMillon announced the the deal, pending regulatory approval, Reuters reports.
The acquisition will affect Wal-Mart’s 2017 earnings marginally more than the retailer’s initial estimate of a 5 cent-per-share impact as the transaction closed ahead of time, it said.
The deal, the largest for an online startup, gives Wal-Mart access to Jet.com’s innovative pricing software and will help the Bentonville, Arkansas-based retailer better compete with online rival Amazon.com Inc.
“A lot of folks ask me ‘Why Jet.com?,” McMillon said in a blog post.
The answer he said was in the savings both Wal-Mart and Jet can together offer shoppers.
Jet, with its ability to lower prices as customers add more items to their shopping carts, will help the world’s largest retailer reach more customers such as millennial shoppers.
The deal would also strengthen Wal-Mart’s existing e-commerce infrastructure, McMillon said.
Wal-Mart has built its website into the second largest online retailer by traffic in the U.S. in the past six months, the blog post said.
It has also expanded the assortment of products on its website from 7 million to 15 million items and is adding a million more each month.
Jet founder Marc Lore will join Wal-Mart as the president and chief executive of Wal-Mart’s US e-commerce business and will report to McMillon.
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