Amazon to Buy Whole Foods For $13.7 Billion in Cash
Internet retail giant Amazon will buy leading natural and organic supermarket chain Whole Foods in a deal valued at $13.7 billion, the companies announced Friday.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO in a statement.
“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,” said John Mackey, Whole Foods Market co-founder and CEO in a statement.
Amazon has been exploring real-world brick and mortar retail stores lately, launching several physical bookstores and adding a customer pick-up option to its AmazonFresh grocery service, with varying results.
“This is an earthquake rattling through the grocery sector as well as the retail world. We can only imagine the technological innovation that Amazon will bring to the purchasing experience for the consumer,” said Bankrate.com senior economic analyst Mark Hamrick.
“Now, we can see in hindsight that its recent dithering around the brick-and-mortar experience, as an experiment, was only a rumbling of the seismic event in the offing,” he said.
Following a decline in sales, Mackey has been under pressure from activist investors lately to either restructure or sell itself after his longstanding co-CEO who was more involved with daily operations stepped down.
In a recent interview with Texas Monthly, Mackey called the investors “greedy bastards.”
Supermarket shares slumped on the merger news, with Target dropping by 12 percent, Kroger by 14 percent, and Walmart by almost 6 percent.
Whole Foods stocks soared over 26 percent on the news.