Amazon.com has entered into an agreement to acquire Zappos.com, a shoe and apparel retailer, to expand its online market place.
According to Fred Moran, analyst at Benchmark Co, the purchase will extend Amazon.com’s dominance in the e-commerce market and help fuel its growth, the Bloomberg reported.
Tony Hsieh, CEO of Zappos, said: “We are joining forces with Amazon because there is a huge opportunity to utilise each other’s strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors. We will continue to build the Zappos brand and culture in our own unique way, and we believe Amazon is the best partner to help us do this over the long term.”
Amazon said it will acquire all of the outstanding shares and assume all outstanding options and warrants of Zappos in exchange of 10 million shares of Amazon common stock. The transaction is valued at $807m based on the average closing price for the 45 trading days ending July 17, 2009.
In addition, Amazon will provide Zappos employees with $40m in cash and restricted stock units. Subject to various closing conditions, the acquisition is expected to close during the Fall of 2009.
Reportedly, following the acquisition, the Zappos management team will remain intact and operate its brand, customer experience and culture of service independently with headquarters in Las Vegas, NV.
