Amazon to purchase Whole Foods for $13.7 billion



It might be the largest grocery bill on record.

In a bombshell announcement, Amazon has announced its intention to buy
Whole Foods for $13.7 billion.

The deal is expected to close later this year, with Amazon taking on Whole
Foods’ debt and paying $42 per share. Whole Foods co-founder John Mackey
will remain Whole Foods’ chief executive. Its headquarters will also stay
in Austin, Texas, where it has called home since 1980.

The acquisition priced caused many Twitter users to make jokes:

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In an email to customers, Whole Foods wrote:

We want to assure you that Amazon shares Whole Foods Market’s deep
commitment to quality and customer service. We will continue to operate our
stores and deliver the highest quality, delicious natural and organic
products that you’ve come to love and trust from Whole Foods Market.

The move marks Amazon’s commitment to dive further into the grocery market.
It already operates AmazonFresh delivery service, and has indicated plans
to launch in-store pick-up at Whole Foods.

Amazon has also been expanding into brick-and-mortar stores with the launch
of AmazonGo, a grocery store where customers don’t have to wait in checkout
lines. Those stores join physical bookstores in Seattle.

“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
Amazon’s founder and chief executive, Jeff Bezos.

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He continued:

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.

The announcement has sent traditional grocery stores and chains such as
Target and Walmart scrambling.

CNN Money reported:

The stocks of traditional grocery stores like Kroger were clobbered Friday
after the deal was announced. So were Walmart and Target, which made big moves into groceries in recent
years and now depend on food for a huge chunk of their sales.

The damage didn’t stop there: Food companies themselves, like Hershey and
Campbell Soup, also slumped because of investor concerns that Amazon will
do for their products what it does for everything else — cut prices
ruthlessly.

Though the news caused trepidation among leaders in the grocery industry,
Amazon boosted its presence on Wall Street with the upcoming purchase.

CNN Money reported:

Contrast the grocery carnage on Wall Street with the
extreme optimism around Amazon. The e-commerce leader’s stock popped another 4% on Friday, lifting its
market value to an incredible $477 billion. Whole Foods (WFM) shares spiked 27% to $42, Amazon’s offer price.

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