Groupon buys rival LivingSocial for a heavy discount
Seth Fiegerman | 10/28/2016, 6 a.m.
(CNNMoney) NEW YORK (CNNMoney) -- Groupon just scored a great deal buying its competitor.
Groupon announced Wednesday it has agreed to buy LivingSocial, its onetime rival in the daily deals market, for a price low enough to be considered "not material."
The acquisition marks the end of a remarkable comedown for LivingSocial, which was once said to be valued as high as $4.5 billion on the private market.
"This brings together the two pioneering companies in the local space to help merchants grow their business and consumers get great value on local services and activities," LivingSocial said in a statement on its website.
The two companies were founded nearly a decade ago and put a new spin on coupons. Groupon and LivingSocial blasted customers with daily deals by e-mail for restaurants, retailers and other activities in various cities.
In time, some businesses complained about losing money and failing to gain regular customers out of the offers. Many customers also appeared to experience daily deal fatigue.
Groupon managed to go public in late 2011 with a market value of more than $12 billion. Today it is worth about $4 billion.
Along the way, Groupon fired its CEO, went through multiple rounds of layoffs and tried to pivot away from e-mail deals. Instead, customers can visit the site and search for deals there.
LivingSocial suffered a similar fate. In recent years, it replaced its CEO, cut more than half its workforce and tried to focus more on offering customers fun "experiences," regardless of whether they're 50% off.
The LivingSocial brand will continue to exist, at least for now, according to the company. The acquisition is expected to close next month.