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Despite Rumors Of Another Bidder, Wal-Mart Was Only Company Looking To Buy Jet.Com

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Despite Rumors Of Another Bidder, Wal-Mart Was Only Company Looking To Buy Jet.Com

Wal-Mart Stores, Inc. (NYSE: WMT)'s $3 billion purchase of Jet.com has been confirmed, but some investors are justified in asking the question why did the retailer agree to buy the ecommerce startup for a hefty premium?

As reported by The Wall Street Journal, Jet.com was valued at $1.35 billion last October during a round of financing. Many have speculated that Wal-Mart wasn't the only bidder looking to buy Jet.com, so its offer had to be competitive to prevent others from acquiring the company. But this wasn't the case, according to Jet.com's CEO Marc Lore.

Related Link: The Man Behind Jet.Com; The Wall Street Journal Profiles Marc Lore

Lore told Recode in an interview on Monday he began talking with Wal-Mart CEO Doug McMillon back in the spring. He said it "never occurred" to him to "go out and get another offer."

Recode noted the acquisition of Jet.com also gives Wal-Mart access to its proprietary pricing and back-end technology, which will be implemented in Wal-Mart's online business. In addition, Lore will be tasked with overseeing Walmart.com when the segment's CEO Neil Ashe steps down at the end of the fiscal year.

"It gives us the benefit of scale, and I'm really excited to carry this vision out over the next five to 10-plus years," Lore told Recode in the interview. "This is a historic, once-in-a-lifetime opportunity for me and the team."

Finally, Lore said that by selling the company to Wal-Mart he could achieve profitability at a much quicker pace. He also defended the decision to sell and said he "never once" said Jet.com needs to operate as a standalone business forever.

 

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