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Wal-Mart, AOL in U.K. pact
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August 9, 2000: 7:17 a.m. ET
Retailer, ISP take stake in European online shopping service ShopSmart
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LONDON (CNNfn) - Wal-Mart and America Online announced plans Wednesday to take a 22.5 percent stake in privately held U.K. e-commerce service ShopSmart.com, expanding all three companies' online presence throughout Britain and Germany.
No cash is trading hands through the equity investment. Wal-Mart is taking a 14 percent stake in ShopSmart, while AOL is buying 8.5 percent of the Web shopping portal with an option to increase its holdings to 15 percent throughout the four-year strategic alliance.
Wal-Mart, which owns the No. 3 U.K. supermarket chain Asda, will distribute AOL Europe computer disks throughout its 240 stores and the two U.S.-based companies will promote ShopSmart's Web site, a service that allows users to comparatively shop for items ranging from books to clothes to vacations.
AOL, the largest U.S. Internet service provider, also will advertise Asda promotions to its customers.
Wal-Mart, the world's largest retailer, operates its discount department stores throughout Britain and Germany. The company will fold its competing comparison-shopping service in Europe, ValueMad, into ShopSmart.
"We are delighted to have two such world-class organizations as shareholders," ShopSmart CEO Daniel Gestetner said. "This agreement will bring the ShopSmart brand to new and experienced users in both the U.K. and Germany."
According to ShopSmart, it is the biggest online retailer in Britain after Amazon.com's (AMZN: Research, Estimates) main site and the Seattle-based company's U.K. version. ShopSmart, which was founded two years ago, does not sell products online itself, but provides links to a host of other Internet stores.
The company is planning a stock market listing. An initial public offering could be worth £200 million to £300 million ($300 million to $450 million), according to analysts cited by London's Financial Times newspaper. ShopSmart operates in Britain, Germany and Sweden.
In New York on Tuesday, Wal-Mart (WMT: Research, Estimates) stock gained 2-1/2 to 57-5/8, while AOL (AOL: Research, Estimates), which is buying Time Warner Inc. (TWX: Research, Estimates), the parent company of CNN and CNNfn, rose 1-1/16 to 54-1/16. 
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