Amazon to acquire Whole Foods in 13.7 billion dollars bet on groceries | Progresiv

Amazon will acquire Whole Foods Market in a 13.7 billion dollars deal, marking the biggest transaction ever for the e-commerce giant as it pushes deeper into groceries.

Amazon will pay 42 dollars a share in cash for the organic-food chain, the companies said on Friday. John Mackey, Whole Foods’ outspoken co-founder and chief executive officer, will continue to run the business.

The deal sends a shockwave across both the online and brick-and-mortar industries, uniting two brands that weren’t seen as obvious partners. But Whole Foods came under pressure to find a buyer this year after activist investor Jana Partners acquired a stake and began pushing for a deal. Jana’s move irked Mackey, who has referred to Whole Foods as his “baby.” By enlisting Amazon, he gets to keep his job as CEO of the grocery chain.

Amazon’s biggest acquisition to date came in 2014, when it agreed to buy video-game service Twitch Interactive Inc. for 970 million dollars in cash, according to data compiled by Bloomberg. The Seattle-based company had about 21.5 billion dollars of cash and equivalents at the end of March, the data shows.

“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.

The takeover is slated to be completed in the second half of the year, with Whole Foods’ headquarters remaining in Austin, Texas.

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Amazon previously contemplated a takeover of Whole Foods last fall, but it didn’t pursue a deal, a person with knowledge of the situation have said. The e-commerce company revisited the idea after Jana stepped in.

“Amazon clearly wants to be in grocery, clearly believes a physical presence gives them an advantage,” said Michael Pachter, an analyst at Wedbush Securities. “I assume the physical presence gives them the ability to distribute other products more locally. So theoretically you could get 5-minute delivery.” (www.esmmagazine.com)