Amazon to Buy Whole Foods for $13.7 Billion

Amazon Jeff Bezos
Courtesy of Amazon

Amazon has a deal to buy Whole Foods, the online retailer announced on Friday.

The all-cash transaction is valued at $13.7 billion, with Amazon assuming Whole Foods’ debt. It comes out to roughly $42 a share — a 27% premium on its closing price on Thursday.

Amazon has moved heavily into the grocery delivery business, offering food through its AmazonFresh service. Whole Foods will still operate stores under its name and will continue to be headquartered in Austin, Texas. CEO John Mackey will also retain his job.

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It’s the most Amazon has ever shelled out for a company, topping the $1.7 billion it spent to buy shoe and clothing retailer Zappos in 2009.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Amazon CEO Jeff Bezos said in a statement. “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.”

Shares of Amazon were trading at $988.52 in pre-market trading, a 2.53% jump, while Whole Foods shares were down 6.74% at $33.06. News of the deal took a bite out of stocks at competitors such as Walmart and Kroger.

The deal still needs to gain regulatory approvals and is subject to a Whole Foods shareholders vote. The companies said they expect to close the transaction during the second half of 2017.

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  1. Kaboom! says:

    Coming to a Whole Foods near you……Oreo cookies, thanks to Amazon. I can see it now….the nonGMO, organic, vegan/vegetarian, gluten intolerant cramming those cookies in their mouths as they walk down the aisles. They will all be overweight again in no time.

  2. heyitsron says:

    Time will tell if Jeff runs all of us away. Or works to maintain customer loyalty. Many of us readily accept “Whole Paycheck” because of corporate concern for the health of their customers. That is, none of that HFCS poison in any foods stocked on the shelves or in the store. That means none of those popular soft drinks who place profit motive above the health of their customers. And no embalming fluid to extend shelf life for products that don’t sell. HFCS is highly addictive, contributes to diabetes, and also makes you fat. But it is dirt cheap. So if you decide money is your motive, that you want to recoup that $13 billion as quickly as possible and create an “anything goes” on your shelves you can count me and many others out. It will then be TRADERS all the way. The last bastion of healthy foods (if you can overlook the high sodium content in some of their foods as a preservative) but then that all comes from reading labels–something we don’t yet have to do at Whole Foods. So we go from Fresh Fields to Whole Foods to now what?

  3. Silent Velcro says:

    This has to be illegal.

    • Frank says:

      I never got how whole foods makes a profit when all the prices are a lot more than all other stores. I don’t know.
      All the emoyees are nice and always busy working, but that’s an in store experience and how would a person know if food shipped has been kept at a proper temp. or a fresh selection as opposed to day old or two day old. It certainly is another layer of labor to overlook shipping quality. Of course food is always a guarnteed sale. Hahahaha.

      • JoeMcG says:

        Stop for a minute… you say, “I never got how whole foods makes a profit when all the prices are a lot more than all other stores.” You answered your own question! They make a profit because they charge more! And their customers are willing to pay more because they feel they’re getting more for that price… better quality, better customer service, better experience. Whole Foods caters to a specific niche in the marketplace… they’re not out to be a mass-merchandiser. Mind you, I don’t shop there. I can’t afford those prices. I’m more of a Trader Joe’s guy. But it’s an interesting move for Amazon. They’re not only buying the cache of a high-end brand, but they’re getting an incredible infrastructure they can leverage for their Amazon Fresh business. It’s a smart move.

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