Lowe (NYSE: LOWE) announced on Tuesday that it had signed a deal to sell online merchandising services to Walmart (NYSE : WMT) through its online store.
In return, Lowe will buy up to $1 billion worth of inventory from Walmart through the sale of online merchandise, including clothing, shoes, home furnishings and electronics.
The deal is the largest of its kind to date for Walmart, which has about 30 percent of the retail market in the United States.
The terms of the deal were not disclosed.
“Our commitment to Walmart is clear,” said Bob Murray, the president of Lowe and former chairman and CEO of Walmart Stores Inc. “This transaction will strengthen our partnership with Walmart and provide an even better online experience for customers.”
Lowe has sold online services to Amazon.com Inc. and other online retailers since 2014, according to Bloomberg data.
The company currently has about 3,000 stores, which are primarily located in the U.S., China and India.
The new deal with Walmart will expand the company’s presence in the global e-commerce market.
Walmart plans to have approximately 7,000 retail locations in 2020, and its total revenue from online sales will grow from $1.08 billion to $5.76 billion.
Walmart said in a statement that the deal would help “bring greater convenience to our customers and improve our bottom line.”
The online shopping service is expected to cost Lowe about $9 billion.
“The acquisition of Lowes online store enables us to expand our portfolio of products and services in this segment, further strengthen our relationships with our suppliers and increase our efficiency and profitability,” Walmart chief financial officer James Loh said in the statement.
“Lowe’s commitment to the marketplace, combined with our existing relationships with Walmart, will help us grow and support our employees and suppliers and will further strengthen the company as an online retailer.”
Amazon (NASDAQ: AMZN) also has a partnership with Lowe.
Amazon has about 10,000 online stores in the country, with more than 1,000 locations in the Midwest and the South.
Amazon is a division of Amazon.
Com Inc. Amazon also has about 9,000 physical stores, most in the Middle East and North Africa.
The online sales platform will be able to sell merchandise on Amazon’s Prime membership program, and the company has a strong relationship with Lowes in that space.
“We’re thrilled to be partnering with Lowers online store to bring the full range of its portfolio to Walmart, including the latest products and accessories,” Amazon said in its statement.
Walmart has a relatively small presence in online retail, having only about 4,500 stores.
The retail giant has struggled to gain a foothold in the online space, having struggled to establish a foothold with e-tailers such as Amazon.
Amazon and Lowe’s were both bought by Wal-Mart Stores Inc., which in 2018 raised $5 billion in a $6.5 billion acquisition.
The merger was expected to close by the end of the year.
The combined company has about 1,200 stores.
Walmart and Lowes have been rivals since Walmart acquired Lowes for $1 in 2007.
Amazon’s online business has grown rapidly in the last decade.
It has about 6,000 retailers, and it has more than 3,500 physical stores.
Amazon acquired Whole Foods Inc. in 2016 for $13.2 billion.
The companies have since worked to develop a new relationship.
Walmart bought Lowes from its founder in 2013, and Lowe bought Walmart from the founder in 2012.