Amazon to acquire rival Zappos for $847 million

Online retail giant Inc. announced that it has reached an agreement to acquire, Inc. a leader in online apparel and footwear sales, for approximately $807 million in order to strengthen its presence in the trendy segment.

Under the deal, Amazon will acquire all of the outstanding shares and assume all outstanding options and warrants in exchange for about 10 million shares of Amazon common stock amounting $807 million, based on average closing price for the 45 days ending 17 July, 2009.

Amazon founder and CEO Jeff Bezos In addition, Amazon will give $40 million in cash and stock to Zappos employees.

Subject to customary approvals, the deal is expected to be closed before the end of the year.

Amazon founder and CEO Jeff Bezos said, ''Zappos is a customer focused company, we see great opportunities for both companies to learn from each other and create even better experiences for our customers.''

Following the acquisition, the Zappos management team will remain intact and Zappos will operate its successful brand, customer experience and unique culture of service independently with headquarters in Las Vegas, Nevada.