Published: Mon, June 19, 2017
Research | By Jo Caldwell

Amazon Is Buying Whole Foods for $13.7 Billion

Amazon Is Buying Whole Foods for $13.7 Billion

In a convergence of online and traditional retailing, Amazon is buying Whole Foods Market, Inc., for $13.7 billion in cash.

Shoppers will continue to have access to Whole Foods through Instacart while the Amazon deal is going through the approval process, a source familiar with the partnerships told CNN Tech.

Whole Foods would also pay a $US400 million termination fee to Amazon if the grocer receives a better offer or the board of directors pulls the company out of the deal.

"We want to assure you that Amazon shares Whole Foods Market's deep commitment to quality and customer service".

The aquisition of the high-end, elite grocery store chain specializing in organic food, with 456 locations, will allow Amazon to integrate brick-and-mortar retail into its operations, and also move into the grocery industry.

Amazon has sought to both enter the grocery market with its Fresh grocery delivery service and beef up a more traditional physical retail presence with a small fleet of bookstores and mall kiosks along with two grocery stores and a convenience store in Seattle. In the fiscal year 2016, the Company had sales of approximately $16 billion and has more than 460 stores in the United States, Canada, and the United Kingdom.

Under the Amazon deal, it would continue operating stores under its Whole Foods banner, co-founder John Mackey would remain CEO, and Whole Foods would stay headquartered in Austin, Texas.

A Whole Foods Market purchase awaits placement in a auto trunk, outside the Jackson, Miss., store Friday, June 16, 2017.

Set up in 1978, Whole Foods, whose stores now span more than 430 locations, has found it hard to attract more mainstream consumers as Walmart and other large chains have stepped up their sales of natural and organic products.

"It's too soon to say if we would reconsider or change anything" about the relationship with Amazon Prime Now, Hardy said.

Amazon, started in Seattle in 1994 by Bezos, a former hedge fund manager, has grown into the world's biggest diversified online retailer, with a market capitalization of almost $500 billion. Amazon also offers grocery shipments elsewhere, but that's tough with perishable foods.

Whole Foods wove its way into the crowded and competitive Dayton grocers market in 2015, with its first Dayton-area store, in Washington Twp.at 1050 Miamisburg-Centerville Road.

Shares of dozens of supermarkets, food producers, payment processors and shopping malls collectively lost at least $35 billion in US market value on Friday as the news reverberated across financial markets. Amazon could integrate it with technological advancements to improve the shopping experience, and, in turn, help Whole Foods rein in revenue. The giant retailer sank $3.67, or 4.7 percent, to $75.24. "This deal gives them credibility with consumers and a major foothold in that space". The parties expect to close the transaction during the second half of 2017.

Like this: