Amazon.com will buy online shoe and apparel retailer Zappos.com for US$847 million in cash and stock, the companies announced Wednesday.
Zappos.com, which focuses on delivering good customer service, offers more than 2.8 million products for sale, including shoes, jewelry, housewares, backpacks and clothing. Launched in 1999, the company had more than $1 billion in sales in 2008, according to its Web site.
Under the terms of an agreement announced Wednesday, Amazon will acquire all outstanding shares and assume all outstanding options of Zappos in exchange for approximately 10 million shares of Amazon common stock. Those Zappos shares are worth about $807 million. In addition, Amazon will give Zappos employees about $40 million in case and restricted stock.
The companies expect the deal to close late this year.
After the acquisition, the Zappos management team will remain intact and Zappos will operate independently out of its Las Vegas headquarters, Amazon said in a press release.
The deal will give the two companies a "huge opportunity to utilize each other's strengths and move even faster towards our vision of delivering happiness to customers, employees and vendors," Tony Hsieh, CEO of Zappos, said in a statement.