FOSTER CITY, Calif. and KIRKLAND, Wash.--(BUSINESS WIRE)--June 26, 2000--Webvan Group, Inc. (Nasdaq: WBVN - news) and HomeGrocer.com, Inc. (Nasdaq: HOMG - news) today announced they have entered into a definitive merger agreement under which Webvan will acquire HomeGrocer.com in a stock-for-stock transaction. The transaction is valued at approximately $1.2 billion, based on last Friday's closing price of $8.72 per share of Webvan stock.
The merger unites two of the leading online retailers that have personalized delivery capabilities. The combined company will operate under the name Webvan Group, Inc.
The combination is expected to extend Webvan's market reach to a total of 13 U.S. metropolitan areas by the end of 2000. Webvan and HomeGrocer currently operate in nine major metropolitan areas. By the end of the year, as a result of the merger Webvan expects to serve metropolitan area markets in Atlanta, Baltimore, Bergen County (NJ), Chicago, Dallas, Los Angeles, Orange County (CA), Portland (OR), Sacramento, San Diego, San Francisco, Seattle, and Washington, D.C.
Under the terms of the agreement, HomeGrocer.com stockholders will receive 1.07605 shares of Webvan common stock in exchange for each HomeGrocer.com share held. Approximately 138 million shares of Webvan stock will be exchanged for all currently outstanding shares of HomeGrocer.com.
The companies expect the transaction to close late in the third quarter or early fourth quarter of 2000, upon satisfaction of customary closing conditions and upon receipt of governmental and shareholder approvals. The merger will be accounted for as a purchase transaction. The proposed merger was unanimously approved by the boards of directors of both companies.
``Webvan's combination with HomeGrocer harnesses the energy and resources of both organizations and creates an even more attractive shopping proposition for consumers -- one that will draw them out of traditional stores and into our Internet marketplace,'' said George T. Shaheen, president and chief executive officer of Webvan Group, Inc. ``Clearly, the online marketplace is evolving. With this merger, we are moving early and aggressively to consolidate two successful companies to build a strong `Last-Mile' Internet retailer.''
``Webvan and HomeGrocer present an extraordinarily good business fit,'' Shaheen continued. ``This merger will reduce our combined capital needs and enhance our financial strength. It generates significant marketing and operating efficiencies. It is also a good fit from the standpoint of market reach, expansion, and fulfillment and distribution infrastructure.''
Mary Alice Taylor, chairman and chief executive officer of HomeGrocer.com, said, ``This merger establishes a clear leader in the online shopping segment. We believe this combination will create greater shareholder value for both companies, and will position the unified company for strong future growth.
``Our people are our strength, and we believe Webvan's employees share our customer-centered approach to business,'' Taylor continued. ``Together, we will have the talent, technology, resources and scope to build a powerful physical portal into the home and revolutionize the way people shop.''
Upon completion of the acquisition, Webvan's founder Louis Borders will remain as chairman of the board of Webvan Group, Inc. and Shaheen will continue as president and chief executive officer of the combined company. In addition, two new members will join Webvan's board of directors.
``This merger makes tremendous sense from every perspective,'' said Jim Barksdale, partner of The Barksdale Group, who will be joining the Webvan board. ``The combination of Webvan and HomeGrocer creates a powerful Internet retailer with broad market reach. The convenience of the Internet's total shopping experience will be the hallmark of the combined companies.''
(In addition to Borders and Shaheen, Webvan's current board of directors is comprised of David M. Beirne, general partner, Benchmark Capital; Michael Moritz, general partner, Sequoia Capital; Christos M. Cotsakos, chairman and chief executive officer of E*Trade Group; and Tim Koogle, chairman and chief executive officer of Yahoo!, Inc.)
Establishes Clear Industry Leader
The transaction accelerates Webvan's commitment to online retailing and building the infrastructure to be the leader in delivering the ``Last Mile'' of e-commerce. ``Webvan has always believed in building an efficient scalable infrastructure in order to deliver the 'Last Mile' of e-commerce,'' Shaheen added. ``With the grocery category we are able to drive frequency of contact and build strong customer relationships. We continue to augment these offerings with a broad selection of premium consumer products such as books, personal electronics, and home entertainment.'' |
