CHICAGO, U.S. - Groupon has announced that it would be acquiring its competitor, LivingSocial. The amount of the takeover has not been revealed. The announcement was put forward in the ...
• The announcement was put forward in the third quarter earnings release
• The amount of the takeover has not been revealed
• Groupon reported a loss of $38 million on revenue of $720. 5 million in the quarter ending September 30
CHICAGO, U.S. - Groupon has announced that it would be acquiring its competitor, LivingSocial. The amount of the takeover has not been revealed.
The announcement was put forward in the third quarter earnings release. The statement mentioned that the agreement was reached on Monday and the deal was to be put into motion next month.
Although the amount of the takeover hasn’t been made public, Groupon had stated that, “The acquisition consideration is not material.”
Both LivingSocial and Groupon, formed a decade back have faced their set of highs and lows. More recently, Groupon reported a loss of almost $38 million on revenue of $720. 5 million in the quarter ending September 30.
The company went public in late 2011 with a market value of more than $12 billion and currently is estimated to be worth about $4 billion.
In its recent years, the company has witnessed several rounds of layoffs and has even fired its CEO.
LivingSocial, on the other hand has suffered a similar fate, after recording an integral period of high soon after it was launched.
The company cut more than half of its workforce recently and replaced its CEO.
It is not known whether LivingSocial will become the subsidiary of Groupon. The plight of the current employees of LivingSocial is not known either.
LivingSocial, in a statement, said, “There will be no change at this point with respect to how consumers and merchants engage with the LivingSocial brand, and the company will remain focused on providing even better experiences to its users as part of the Groupon family in the future.”
Before selling out to Groupon, LivingSocial had planned on shifting its business from daily deals to other promotional material like presenting individuals with small incentives at restaurants and other businesses.
CEO of Groupon, Rich Williams, mentioned that buying LivingSocial will provide the company with new potential consumers to the tune of 1 million new potential buyers.
Williams stated, “With LivingSocial we saw both an opportunity to acquire a significant number of new customers at an attractive ROI as well as a solid brand and loyal customer base that could benefit from Groupon’s scale and broader inventory across categories.”