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EXHIBIT 99.1
FOR IMMEDIATE RELEASE, 7 AM (EDT)
WEBVAN AND HOMEGROCER AGREE TO MERGE
COMBINATION EXPANDS MARKET REACH,
STRENGTHENS COMPETITIVE POSITION & CREATES ECONOMIC EFFICIENCIES
FOSTER CITY, CA AND KIRKLAND, WA (26 June 2000) - Webvan Group, Inc. (Nasdaq:
WBVN) and HomeGrocer.com, Inc. (Nasdaq: HOMG) today announced they have entered
into a definitive merger agreement under which Webvan will acquire
HomeGrocer.com in a stock-for-stock transaction. The transaction is valued at
approximately $1.2 billion, based on last Friday's closing price of $8.72 per
share of Webvan stock.
The merger unites two of the leading online retailers that have personalized
delivery capabilities. The combined company will operate under the name Webvan
Group, Inc.
The combination is expected to extend Webvan's market reach to a total of 13
U.S. metropolitan areas by the end of 2000. Webvan and HomeGrocer currently
operate in nine major metropolitan areas. By the end of the year, as a result of
the merger Webvan expects to serve metropolitan area markets in Atlanta,
Baltimore, Bergen County (NJ), Chicago, Dallas, Los Angeles, Orange County (CA),
Portland (OR), Sacramento, San Diego, San Francisco, Seattle, and Washington,
D.C.
Under the terms of the agreement, HomeGrocer.com stockholders will receive
1.07605 shares of Webvan common stock in exchange for each HomeGrocer.com share
held. Approximately 138 million shares of Webvan stock will be exchanged for all
currently outstanding shares of HomeGrocer.com.
The companies expect the transaction to close late in the third quarter or early
fourth quarter of 2000, upon satisfaction of customary closing conditions and
upon receipt of governmental and shareholder approvals. The merger will be
accounted for as a purchase transaction. The proposed merger was unanimously
approved by the boards of directors of both companies.
"Webvan's combination with HomeGrocer harnesses the energy and resources of both
organizations and creates an even more attractive shopping proposition for
consumers - one that will draw them out of traditional stores and into our
Internet marketplace," said George T. Shaheen, president and chief executive
officer of Webvan Group, Inc. "Clearly, the online marketplace is evolving. With
this merger, we are moving early and aggressively to consolidate two successful
companies to build a strong `Last-Mile' Internet retailer.
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"Webvan and HomeGrocer present an extraordinarily good business fit," Shaheen
continued. "This merger will reduce our combined capital needs and enhance our
financial strength. It generates significant marketing and operating
efficiencies. It is also a good fit from the standpoint of market reach,
expansion, and fulfillment and distribution infrastructure."
Mary Alice Taylor, chairman and chief executive officer of HomeGrocer.com, said,
"This merger establishes a clear leader in the online shopping segment. We
believe this combination will create greater shareholder value for both
companies, and will position the unified company for strong future growth.
"Our people are our strength, and we believe Webvan's employees share our
customer-centered approach to business," Taylor continued. "Together, we will
have the talent, technology, resources and scope to build a powerful physical
portal into the home and revolutionize the way people shop."
Upon completion of the acquisition, Webvan's founder Louis Borders will remain
as chairman of the board of Webvan Group, Inc. and Shaheen will continue as
president and chief executive officer of the combined company. In addition, two
new members will join Webvan's board of directors.
"This merger makes tremendous sense from every perspective," said Jim Barksdale,
partner of The Barksdale Group, who will be joining the Webvan board. "The
combination of Webvan and HomeGrocer creates a powerful Internet retailer with
broad market reach. The convenience of the Internet's total shopping experience
will be the hallmark of the combined companies."
(In addition to Borders and Shaheen, Webvan's current board of directors is
comprised of David M. Beirne, general partner, Benchmark Capital; Michael
Moritz, general partner, Sequoia Capital; Christos M. Cotsakos, chairman and
chief executive officer of E*Trade Group; and Tim Koogle, chairman and chief
executive officer of Yahoo!, Inc.)
ESTABLISHES CLEAR INDUSTRY LEADER
The transaction accelerates Webvan's commitment to online retailing and building
the infrastructure to be the leader in delivering the "Last Mile" of e-commerce.
"Webvan has always believed in building an efficient scalable infrastructure in
order to deliver the 'Last Mile' of e-commerce," Shaheen added. "With the
grocery category we are able to drive frequency of contact and build strong
customer relationships. We continue to augment these offerings with a broad
selection of premium consumer products such as books, personal electronics, and
home entertainment."
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CONFERENCE CALL
Webvan will hold a conference call to discuss the merger. The call will be held
at 8:00AM (EDT) and hosted by George T. Shaheen and Mary Alice Taylor. It can be
accessed by dialing (712) 271-1134. The replay of the call can be accessed by
dialing (402) 998-1146 and will be available beginning today, Monday, June 26
until Monday, July 3, at 12:00 Midnight (PDT).
ABOUT WEBVAN
Webvan Group, Inc. is setting a new standard for Internet retailing, combining
for the first time the convenience of online shopping with a personalized
courier service that delivers products into customers' homes within a 30-minute
window of their choosing. Through its Web site, http://www.webvan.com, Webvan
offers a broad selection of quality products at competitive prices. The
company's relentless focus on customer service, innovation, and value saves its
customers time and money. Webvan's corporate headquarters are located in Foster
City, CA.
ABOUT HOMEGROCER.COM
HomeGrocer.com, based in Kirkland, Wash., combines technology with highly
personalized service to revolutionize the way people shop. The HomeGrocer.com
system integrates its Internet Web site, www.homegrocer.com, with its customer
fulfillment centers and fleet of tri-temperature trucks to deliver the highest
quality products directly to consumers' homes or offices. HomeGrocer.com offers
an extensive selection of groceries and household goods, including name-brand
items, top-quality produce, meats, seafood and dairy products, fresh flowers,
health and beauty aids, and top-selling books, videos and movies.
HomeGrocer.com's shares are quoted on the Nasdaq under the symbol "HOMG."
WHERE YOU CAN FIND ADDITIONAL INFORMATION:
Investors and securityholders are urged to read the joint proxy
statement/prospectus regarding the proposed merger when it becomes available
because it will contain important information about the transaction. The joint
proxy statement/prospectus will be filed with the Securities and Exchange
Commission by Webvan Group, Inc. and HomeGrocer.com, Inc. Investors and
securityholders may obtain a free copy of the joint proxy statement/prospects
(when it is available) and other documents filed by Webvan and HomeGrocer.com
with the Commission at the Commission's Web site at www.sec.gov. The joint proxy
statement/prospectus and these other documents may also be obtained for free
from Webvan or HomeGrocer.com.
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Webvan and its executive officers and directors may be deemed to be participants
in the solicitation of proxies from Webvan's stockholders with respect to the
transactions contemplated by the merger agreement. Information regarding such
officers and directors is included in Webvan's Proxy Statement for its 2000
Annual Meeting of Stockholders filed with the Securities and Exchange Commission
on May 11, 2000. This document is available free of charge at the Securities and
Exchange Commission's Web site at http://www.sec.gov and from Webvan.
Homegrocer.com and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from shareholders of HomeGrocer.com
with respect to the transactions contemplated by the merger agreement.
Information regarding such officers and directors is included in
HomeGrocer.com's S-1 Registration Statement filed with the Securities and
Exchange Commission on December 17, 1999. This document is available free of
charge at the Securities and Exchange Commission's Web site at
http://www.sec.gov and from HomeGrocer.com.
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Safe Harbor Statement under Private Securities Litigation Reform Act of 1995:
The statements contained in this press release that are not historical facts,
including statements relating to enhanced financial strength, improved economic
and operating efficiencies, expansion potential and infrastructure compatibility
are forward-looking statements that involve certain risks and uncertainties,
including but not limited to risks associated with difficulties in successfully
integrating Webvan's and HomeGrocer's businesses and technologies; costs related
to the merger; the availability of funds required to achieve our expansion
plans; failure to obtain required stockholder or regulatory approvals of the
merger; failure of the combined company to retain and hire key executives,
technical personnel and other employees; difficulty of successfully managing a
larger, more geographically dispersed organization; difficulties in developing
relationships with suppliers of non-grocery product categories necessary to
function as the last mile of e-commerce.
CONTACTS:
Media: Investors:
Bud Grebey Bob Okunski
Webvan Group, Inc. Webvan Group, Inc.
650.627.3558 650.627.3944
Pauline Yoshihashi Dan Lee
HomeGrocer.com HomeGrocer.com
425.201.7599 425.201.7848
