You read that correct, and that’s a CASH deal, too. The online retail GIANT is doing a $13.7 billion dollar cash deal with Whole Foods. “The deal values Whole Foods at $42 a share, 27% higher than where the stock was trading Thursday.” 1
Amazon has reportedly announced that Whole Foods stores will continue to operate under their name (as a separate unit of the company), their CEO John Mackey will stay on, and headquarters will remain in Austin, Texas.
“The deal shows Amazon’s interest in moving into the business of operating traditional brick-and-mortar stores, even as many retailers that have been crippled by Amazon’s growth have announced a series of store closings.
It also shows Amazon’s growing interest in groceries. The company has its own delivery service, AmazonFresh, and is experimenting with a “click and collect” model, offering customers to buy groceries online, then pick them up in person.
The supermarket business, like many other parts of retail, has been hit hard by increased competition from Amazon itself, as well as Walmart.” 1
Amazon’s deal for Whole Foods demonstrates the leadership and vision of Jeff Bezos; their market value is greater than that of the 12 largest traditional general retailers- combined.
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Founded in 1978, Whole Foods is thought by most to have been the catalyst that helped organic food go mainstream. The company currently has around 87,000 employees and more than 460 stores (mostly in the U.S.), as well as Canada and the U.K.
While high prices have been a problem for Whole Foods in the last couple of years, something not helped out by John Oliver (see his lampoon below) or the overcharging accusation made by regulators in New York City in 2015, it seems Bezos is willing to inherit the bad PR and move forward. (Which is a good thing because sales growth at Whole Foods has slowed and profits have yet to return to levels before the price scandal. 2)
