Amazon To Acquire Whole Foods Market For $13.7 Billion

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Amazon said today it's buying the supermarket Whole Foods in a deal valued at almost $14 billion.

The grocer will continue to operate stores under the Whole Foods Market brand and John Mackey will remain as its chief executive officer, the companies said.

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.

Amazon is making a bold expansion into physical stores with the $13.7 billion deal to buy Whole Foods, setting the stage for radical retail experiments that could revolutionize how people buy groceries and everything else. Walmart, which has the largest share of the US food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business.

With the Whole Foods deal, the company acquired a top-notch brand name with more than 400 stores, most of which are in upscale neighborhoods, for a reasonable price.

Some customers said they believe Whole Foods shoppers will quickly adapt if Amazon does widen the online grocery shopping experience.

- Sysco. The food distributor sank $1.15, or 1.2 percent, to $54.38.

Whole Foods Market started in 1978, and employees about 87000 people in its roughly 460 stores across the US, UK and Canada.

West Hartford resident Nancy Kennedy, 88, who stopped by the Whole Foods store to shop, said she does not go online because she's not familiar with digital technology.

"I'm excited to see maybe if they do some kind of thing with Prime now and Whole Foods, that would be interesting to me", Hiddeman said.

Whole Foods Market's share price rose more than 29% on Friday.

And grocery may take a middle path, says Kimberly Scott, a portfolio manager at the Ivy Mid Cap Growth Fund, which counts Whole Foods stock as one of its biggest investments.

Walmart, which has the largest share of the US food market, has already been pushing harder into e-commerce to build on strength in its stores and groceries. Based on his forecasts, Amazon will likely rank as the ninth largest USA grocery retailer this year - though he expects it to assume third place by 2021, behind only Walmart and Kroger. In an email to customers, the company said it planned to maintain the same standards under Amazon, including bans on artificial flavors and colors. For 10 years, the company has offered a type of food delivery service via Fresh, but that simply won't do, it seems.

Amazon will gain a footprint of 456 supermarket stores in North America and Britain with the acquisition of Whole Foods, boosting its delivery capacity and allowing it to compete directly with U.S. chains such as Kroger Co and Albertsons LLC. Consider Walmart's $3.3 billion purchase of Jet.com last August - a move that has paid big dividends in the retailer's digital growth already - and yesterday's overshadowed announcement that it bought menswear specialist Bonobos for $310 million.

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