- Amazon to acquire Whole Foods for $42 a share, in a deal valued at $13.7 billion.
- John Mackey will remain CEO of the grocery store chain.
- The deal is expected to close in the second half year.
Amazon’s offer represents a 27 percent premium to Whole Foods’ closing price on Thursday. With Whole Foods shares trading around Amazon’s offer price, investors appear to be speculating that another suitor could make a play for the grocery chain.
Among those who could potentially make a bid are Wal-Mart, who has been focusing its dealmaking on bulking up its digital business, and JAB Holdings, a private equity player that has been shifting its focus to restaurants and food and beverage businesses.
Whole Foods has been under pressure from activist investor Jana Partners and money manager Neuberger Berman, which have called on Whole Foods to sell itself. The investors have criticized Whole Foods for its poor performance, and have suggested the chain could be merged with another grocer.
“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,” John Mackey, Whole Foods’ CEO, said in a statement.
Mackey will remain CEO of the grocery store chain after the deal closes, and the store will continue to operate under the Whole Foods brand.
Amazon has long been pushing to expand its online grocery business, seeing it as an emerging opportunity. Currently, very few people purchase their groceries online even as more shoppers switch to buying other goods that way. About 12 percent of U.S. grocery shoppers bought their groceries online at some point in 2016, according to Cowen and Company.
Millennials, in particular, were the biggest group of consumers to use online grocery shopping. last year. Older millennials, those aged 25 to 34, were twice as likely to buy online … (read more)