FOSTER CITY, Calif. (Reuters) - Online grocer Webvan Group (WBVN) Inc. (WBVN) on Monday said it would buy rival HomeGrocer.com (HOMG) Inc. (HOMG) in a stock deal valued at $1.2 billion.
The merger unites a pair of Web-based grocers with personalized delivery capabilities, both competing in the beleaguered and rapidly consolidating Internet retailing sector. The combined company will operate under the name Webvan Group Inc, the company said in a statement.
Terms of the deal call for Webvan to issue 1.07605 shares of its stock for each HomeGrocer share, pegging the deal's value at about $1.2 billion based on Webvan's closing price Friday of 8-23/32 on Nasdaq.
That values Kirkland, Wash.-based HomeGrocer at about $9.38 per share, a premium of about 16 percent over its Friday close of 8-3/32, also on Nasdaq.
The combination is expected to extend Webvan's market reach to a total of 13 U.S. metropolitan areas by the end of 2000, it said. Webvan and HomeGrocer currently operate in nine major metropolitan areas.
Copyright 2000, Reuters News (dossier) Service
