This Is the Largest Amazon Acquisition to Date
We first reported on Amazon Go, the new Seattle-based grocery enterprise of Amazon, back in January. At the time, it seemed like an interesting opportunity for the all-online retailer, and something to watch out for. Today, Amazon itself confirmed the importance of that post.
This morning, Amazon and Whole Foods Markets announced a record breaking $13.7 billion buyout/merger. The largest acquisition by Amazon to date, this new arsenal of goods and services proves that the internet giant is ready to go all-in on the grocery game.
According to several news sources, Whole Foods Market has been quietly looking for a buyer since a large investment by activist firm Jana Partners LLC earlier this year. With a heap of unresolved debt and the reality of a changing face in the organic and health food markets facing them, Whole Foods needed to make a change to stay alive. This deal with Amazon represents that change, while also allowing Whole Foods to remain autonomous and relevant to its market.
A press release from Whole Foods explains that the buyout will be all in cash. Amazon will pay $42 per share of Whole Foods stock, which should total $13.7 billion. As a result, trading on Whole Foods has halted this morning and the industry is abuzz with speculation.
At this point, what we know for certain is as follows:
- Whole Foods will remain an independent brand
- Whole Foods trusted suppliers, one of the hallmarks of their brand, will continue to stock their stores
- Co-founder John Mackey will remain as CEO
What People Are Saying
The internet community cannot stop talking about this major development in the retail and grocery sectors. Questions about fresh-direct delivery of Whole Foods products via Amazon and/or expansion of the Whole Foods brand name – rather than the Amazon Go and Amazon Fresh concepts – are popular rumors.
Officially, both companies are staying tightlipped about any definitive plans. Instead, they chose to heap praises upon one another, with Amazon CEO Jeff Bezos saying:
Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.
As well as Mackey’s reply that:
This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers.
And for those customers, it truly is an exciting time. With he quality and convenience of Whole Foods and the innovation and forward-thinking of Amazon combined, the possibilities are truly endless.
What do you think about this merger?