Wal-Mart, Amazon Rivalry Spreads to Forklifts
July 21 2017 - 7:29AM
Dow Jones News
By Sarah Nassauer
The rivalry between Wal-Mart Stores Inc. and Amazon.com Inc. has
reached down to the warehouse forklift.
Wal-Mart has agreed to invest in Plug Power Inc. and buy more of
its fuel-cell-powered machines, a move that mirrors a deal struck
by Amazon earlier this year.
"Discussion were going on simultaneously" with the two retailers
starting late last year, said Plug Power Chief Executive Andy
Marsh.
Under the deal announced Friday, Wal-Mart will roll out Plug
Power's forklifts and warehouse vehicles to 10 distribution centers
this year, an investment the manufacturer valued at $80 million.
Wal-Mart is already Plug Power's biggest customer, with 5,500 of
the company's units in 22 warehouses.
In April, Amazon agreed to spend $70 million on Plug Power's
vehicles and received rights to buy as many as 55.3 million shares
in the company, a 19% stake.
Wal-Mart will receive warrants to purchase the exact same number
of shares, though its initial price will be higher than Amazon's
because Plug Power's stock price has risen 63% since announcing its
Amazon deal. Wal-Mart's potential stake is 17%, Mr. Marsh said.
The warrants vest based on how much the two retailers spend on
Plug Power's products and services. Wal-Mart and Amazon would need
to spend $600 million each for all their warrants to vest.
Plug Power also sells fuel-cell-powered vehicles to Home Depot
Inc., Kroger Co. and others. It generated $85.9 million of revenue
in 2016, and Wal-Mart accounted for 34% of it. But the company
hasn't had an annual profit since its founding in 1997.
The Latham, N.Y., company's once highflying stock tumbled as low
as 12 cents in 2013. The shares closed Thursday at $2.12, giving it
a market value of $487 million.
Amazon and Wal-Mart are investing heavily in technology to make
their warehouses more efficient to keep up with surging online
order volumes. They have taken different approaches.
Wal-Mart has bought automation systems developed by third
parties, including Germany's Kuka AG, that can cost tens of
millions of dollars per facility. Amazon has largely developed its
warehouse technology in-house since acquiring robot maker Kiva
Systems Inc. for $775 million in 2012.
Brian Baskin contributed to this article.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
July 21, 2017 07:14 ET (11:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Sep 2023 to Sep 2024