Amazon to buy Zappos
“Earth’s Biggest Selection” is getting bigger.
Retail giant Amazon.com Inc. said Wednesday that it would acquire Zappos.com Inc., an online footwear and apparel company, in a deal valued at $807 million in stock.
The acquisition would expand Amazon’s empire by about 3 million products, including shoes, dresses, handbags and accessories.
The Seattle company is one of the world’s biggest online retailers -- hence the “Earth’s Biggest Selection” slogan.
Under the agreement, Amazon would acquire the company in exchange for 10 million Amazon shares. The stock transaction is worth about $807 million based on Amazon’s average closing price for the 45 trading days ended July 17, the company said.
In addition, the buyer would give Zappos employees $40 million in cash and restricted stock units.
“Zappos is a customer-focused company,” said Jeff Bezos, founder and chief executive of Amazon. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”
The acquisition is expected to close in the fall. The Zappos management team will remain intact and will continue to run the business from its Las Vegas headquarters, Amazon said.
“We are joining forces with Amazon because there is a huge opportunity to utilize each other’s strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors,” said Tony Hsieh, CEO of Zappos. “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.”
The deal was announced after the close of regular trading, when Amazon shares fell 22 cents to $88.79. The shares rose about 1% in after-hours trading.
Privately held Zappos was founded in 1999 as an online shoe seller. The company is known for its generous customer-service policies, including free shipping and free return shipping.
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