Target acquiring Meijer partner Shipt for $550M
Editor's note: This article previously stated incorrectly that the purchase price is $500 million. The purchase price is $550 million.
Another major retailer is entering the delivery market.
Minneapolis-based Target said today it entered an agreement to acquire the retail delivery company Shipt for $550 million in cash.
Shipt has gained traction in Michigan since it partnered with Walker-based Meijer.
Meijer launched its Shipt-based delivery service in Detroit in 2016. The Business Journal previously reported Meijer was on track to make one-million deliveries by the end of 2017.
Meijer said Target’s acquisition of Shipt will not negatively impact their operations.
“Shipt has been an important partner in helping Meijer build its Meijer Home Delivery service,” said Frank Guglielmi, senior director of communications, Meijer. “The changes in Shipt’s ownership will not have an effect on Meijer customers, as we continue to evolve and enhance our home-delivery offering.”
The acquisition aims to expand Target’s digital capabilities by bringing same-day delivery to customers at around half of all stores by early 2018.
The service will be available from the majority of locations before the 2018 holiday season.
“Same-day delivery is a service that our guests are asking for more and more often,” said John Mulligan, COO, Target. “By acquiring Shipt, we’ll be able to take advantage of our network of stores and Shipt’s technology platform and shopper community to quickly offer same-day delivery to millions of our guests.”
At launch, Target will offer same-day delivery of groceries, essentials, home, electronics and other products, while expanding the products offered over time.
By the end of 2019, same-day delivery will include all major product categories at Target.
Shipt will become a subsidiary of Target, but it will operate independently, and its offices will remain in Birmingham, Alabama and San Francisco.
“It’s win-win for us,” said Bill Smith, founder and CEO, Shipt. “We get to continue growing this company we love, at a more accelerated pace. With Target’s support, we’ll be able to reach more customers in more markets across the country.”
The transaction is “subject to customary closing conditions” and is expected to close prior to the end 2017.