Amazon announced it will be acquiring Whole Foods Market on Friday, in a deal valued at approximately $13.7 billion.
Amazon's deal for Whole Foods also further demonstrates the financial might of the Jeff Bezos-led company, whose market value is greater than that of the 12 largest traditional general retailers combined. "Activist" investors Jana Partners and Neuberger Berman were calling for a shake-up, a cutting of costs or a sale.
Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first USA stores just this week.
It's still too early to tell what kind of changes Amazon may or may not implement and how things will impact Whole Foods.
As per the agreement, Whole Foods will continue to operate it's stores, doing so under the Whole Foods Market name and brand.
Maria Prados, who leads global retail and global e-commerce at payment firm Worldpay said the deal sent out a clear signal about Amazon's intention to disrupt the worldwide grocery industry. Amazon started its own grocery delivery service, Amazon Fresh, 10 years ago in its hometown of Seattle. He will remain the company's CEO.
How Analysts Feel About Kier Group plc (LON:KIE)?
Starr International Co Inc holds 84.81% of its portfolio in American International Group Inc for 15.40 million shares. With 85,200 avg volume, 2 days are for Tejon Ranch Company (NYSE:TRC)'s short sellers to cover TRC's short positions.
Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions.
Beleaguered by heightened competition and six quarters of same-store sales declines, Whole Foods had recently cut its full-year sales and profit forecast and revealed plans to close 9 of its 469 stores in the recent quarter.
What's unclear is how Amazon will run a chain of grocery stores.
The Austin-based company also has had to fend off encroachment into its specialty sector by other big-box stores, like Walmart, that have been increasing their food sections and adding more healthy merchandise.
Grocery giant Kroger said Thursday that its profits for the year would be lower than Wall Street expected, sending its stock plunging almost 20%.
Whole Foods' stock was halted. The Russell 2000 index of smaller company stocks shed 3.36 points, or 0.2 percent, to 1,406.73.
Comments