Summary
Amazon.com, Inc. has announced its intention to acquire Zappos.com, Inc. through a merger agreement entered into on July 22, 2009. The acquisition will be structured as a merger of a wholly owned Amazon subsidiary with Zappos, making Zappos a subsidiary of Amazon. The total merger consideration is approximately $838 million, adjusted for Zappos' net debt and other factors, and will be paid primarily in Amazon common stock, valued at an average of $81.09 per share based on recent trading activity. This move signals Amazon's strategic expansion, likely aiming to bolster its online retail presence in the footwear and apparel sector.
Key Highlights
- 1Amazon.com, Inc. enters into a Merger Agreement to acquire Zappos.com, Inc.
- 2The acquisition is valued at approximately $838 million, adjusted for net debt and other terms.
- 3Payment for Zappos will be made primarily in Amazon common stock, with an estimated issuance of 10 million shares.
- 4Zappos employees will receive $40 million in cash and restricted stock units for retention.
- 5A portion of the Amazon shares will be held in escrow for indemnification claims for up to four years.
- 6The transaction is subject to Zappos shareholder approval, antitrust clearance (Hart-Scott-Rodino), and other customary closing conditions.
- 7The merger is expected to close in Fall 2009 and is intended to be a tax-free reorganization.