Walmart has agreed to acquire Jet.com for $3bn in cash, as the world’s largest retailer by sales steps up its fight to dent Amazon’s dominance of e-commerce.

Under the terms of the agreement, $300m of Walmart shares will also be paid over time as part of the transaction, the Arkansas company said in a statement on Monday.

The move comes hard on the heels of Walmart’s partnership with Uber and Lyft to trial home delivery services and the introduction of its own mobile payment system. Walmart will fund the deal from its ample $7.6bn war chest of cash and short-term securities, report Lindsay Whipp and James Fontanella-Khan.

Walmart has so far struggled to impose itself as a market leader in e-commerce, with its online unit accounting for only $14bn in annual sales last year compared to the nearly $100bn generated by Amazon.

Jet.com, which has about 3.6m shoppers and 1,600 sellers on its market place, was founded in 2014 by Marc Lore, who sold his earlier e-ecommerce company Quidsi to Amazon in 2010. Jet’s technology enables it to lower prices if more items can be delivered together from locations closer to the consumer, and according to the speed of delivery chosen by the shopper.

Although Walmart said the two companies will maintain distinct brands, the deal will give the brick and mortar retailer control over Jet.com’s proprietary technology and its customer database. Jet.com in turn is expected gain more pricing power through Walmart, as well as access to further investment.

“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want,” said Doug McMillon, Walmart’s CEO.

“We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com 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.”

Jet.com recently told an industry conference it about $1bn in gross merchandise value and is aiming for $20bn by 2020. And while Walmart reported an annual net profit of $14.7bn in 2015, Jet.com is still not profitable.

The acquisition, which has been approved by the boards of the two companies, is subject to regulatory approval and is expected to close this calendar year.

As part of the deal Mr Lore, who controls about 25 per cent of the company, according to Recode, is set to pocket $750m. Jet’s investors, which include Accel Partners, Bain Capital Ventures, Google Ventures and Alibaba among others, are also likely to make a significant return.

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