Amazon.com is getting serious about its grocery game. News broke this morning that the e-commerce giant is buying Texas-based grocery chain Whole Foods Market for $13.7 billion - its largest transaction to date, according to Bloomberg. Amazon will now have 460 brick-and-mortar stores at its disposal.
Under the terms of the deal, co-founder John Mackey will stay on as chief executive and the retailer will continue to operate under the Whole Foods brand, per Seattle Times
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," said Jeff Bezos, Amazon founder, in a statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades " they're doing an amazing job and we want that to continue."
This move is not a complete shock. There has been plenty of speculation obout a Whole Food sale this year--with Amazon having confirmed it considered a bid last fall--but the company was valued at $10-11 billion at the time [see WSD 04-25-2017]
"Amazon clearly wants to be in grocery, clearly believes a physical presence gives them an advantage," Michael Pachter, an analyst at Wedbush Securities, tells Bloomberg. "I assume the physical presence gives them the ability to distribute other products more locally. So theoretically you could get 5-minute delivery."
The deal is expected to close during the second half. We'll have more as details emerge.
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