Amazon.com Inc., Seattle, announced today (June 16), it will buy grocery chain Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including debt, the company said in a statement.
The mega deal would represent the internet retailer's largest acquisition and biggest push into the brick-and-mortar supermarket sector, with hundred of stores across the U.S.
"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. "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."
John Mackey, Whole Foods’ co-founder and CEO, will continue to run the business as chief executive, and the company's headquarters will remain in Austin, Texas. Whole Foods recently came under pressure from activist hedge fund Jana Partners LLC, prompting it to overhaul its board.
"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," Mackey, stated.
The deal would could give the grocer a significant competitive edge by allowing it to tap Amazon's massive power to buy and sell goods at a lower cost. Analysts say for Amazon, the deal gives it a distribution network for groceries. Amazon has spent years trying to break into delivering groceries, but hasn’t been as successful as in other categories.
Excluding debt, the purchase is valued at $13.39 billion, based on 318.9 million diluted shares outstanding as of April 9. The grocer will continue to operate stores under the Whole Foods Market brand, the companies said.
Amazon and Whole Foods said they expect to close the deal during the second half of 2017.