Amazon to acquire Whole Foods for $13.7bn

Share
Amazon to acquire Whole Foods for $13.7bn

Whole Foods, with its roots linked back to the marriage of a New Orleans grocery co-op and budding Austin, Texas, chain, is being gobbled up almost three decades later by online retailer Amazon in a deal valued at about $13.7 billion.

However, Wal-Mart's shares fell about 7 per cent to $73.65 in morning trading after Amazon unveiled a $13.7 billion deal to buy upmarket grocer Whole Foods Market Inc.

Amazon said Whole Foods stores will continue operating under that name as a separate unit of the company.

John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool's board of directors.

The transaction also may help Amazon sideline Instacart, a start-up that has delivered grocery orders from Whole Foods stores in more than 20 USA states and Washington, DC. Customers select what groceries they want online, then go to a nearby AmazonFresh Pickup location to pick up their order. "Amazon has moved squarely onto the turf of traditional supermarkets and poses a much more significant threat".

Grocery giant Kroger said Thursday that its profits for the year would be lower than Wall Street expected, sending its stock plunging almost 20%.

In the $13.7 billion, all-cash deal, Amazon will buy the Texas-based champion of organic and specialty food for $42 a share.

On top of the usual USA players, grocers from overseas, including Aldi, which is committing billions to expanding its US presence, and Lidl, which opened its first 10 stores just this week, are vying for a piece of the grocery pie.

Even before the announcement Friday, on Thursday Kroger stock "posted a double-digit decline amid food price deflation and stiff competition in the grocery space", analyst Hamrick said.

But Amazon's stock rose 3% on the news.

But the agencies have differing views on Amazon, rated Baa1 by Moody's and AA- by S&P.

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now. and Amazon wasn't one of them! The folks at Amazon are long-term thinkers. The deal is expected to close later this year. "Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an unbelievable job and we want that to continue", Bezos said in the release. It will acquire a grocery chain, Whole Foods, that's got some very nice produce, but has not been growing in any kind of spectacular fashion in recent years. (OK, not really, but it feels like that, doesn't it?) Getting into the grocery business is not easy, but by scooping up ownership shares in Whole Foods, it bought the company's logistic know-how. Whole Foods' headquarters will still be in Austin. The company is often derisively referred to as Whole Paycheck since the company charges a pretty penny for spelt and quinoa.

And the company became the butt of jokes by late-night comedians.

Whole Foods' stock drop was a major reason that activist investors were pushing the grocery chain to sell itself in the first place.

Low: Whole Foods has struggled, and of course one of the big changes they've implemented in the past year is trying to get prices down without sacrificing quality.

Share

Advertisement

Related Posts

Trump calls former FBI Director James Comey's actions 'cowardly' in tweet
Sessions, whose contacts with Russia's ambassador to the U.S. "Who would ask a man to pledge allegiance under oath?" As for those tapes Trump claims he has, Congressional investigators said they want them if they, in fact, exist.

Warriors say no decision has been made on White House visit
They clinched their second championship in three years Monday night with a 129-120 victory over the Cleveland Cavaliers in Game 5 .

Chelsea 1st to visit Tottenham at Wembley in Premier League
August concludes with a clash between Liverpool and Arsenal prior to the worldwide break for the 2018 World Cup qualifiers. It'll be the first time West Ham have played at home on the final day since they played Reading in 2013.

Gunman shoots congressman, police at Virginia baseball practice
Scalise was in critical condition after surgery, according to So Young Pak, spokeswoman for MedStar Washington Hospital Center. Lipinski said the police officers and shooter exchanged gunfire across the baseball field as congressmen scattered.

Sarfraz happy to 'prove critics wrong' after historic win
Hasan Ali has picked up the crucial wickets , and comeback man Junaid Khan has filled the void left by enforcer Wahab Riaz. Looking to cut the ball, Root nicked it to wicketkeeper Sarfraz, as England were reduced to 128 for three.

Sony Has A Weak Excuse For Not Allowing Cross-Platform Play
Sony PlayStation 4 has dominated the latest generation of consoles, outselling Xbox One by 2-to-1, according to industry trackers. The One S can be found for as little as £200 in the United Kingdom , while the One X will cost more than twice as much at £450.

London Tower Block Fire Rises to 17, More Feared Dead
Ms Trevisan reportedly called her mother at 3am, saying a fire had broken out in the building and they were waiting for help. In addition, 74 people were injured in the blaze, with 37 hospitalized and 17 of them still in critical condition.

Arlene Foster and Theresa May set for crucial talks in London
Owen Smith, who challenged Mr Corbyn for the leadership previous year , is predicted to become Shadow Northern Ireland Secretary. One possible effect of Brexit is the "hardening" of the border between UK-controlled Northern Ireland and the state of Ireland.

Philippines says US troops on the ground near besieged Marawi City
Duterte's statement directly contradicts that of US officials. "But they are not allowed to fight , they only provide support". USA military officials say troops are providing help with technical expertise in flying drones and P3 surveillance planes.

Aaron Judge Crushes 495-foot Homer in Yankees' Win
Yankees manager Joe Girardi was concerned enough to push Tanaka back a day in the rotation to give him an extra day of rest. Babe Ruth and Lou Gehrig ? "This series, tip your cap to the Yankees and let's get the hell out of here".

© 2015 ExpressNewsline. All Rights reserved.