Amazon is coughing up a whopping $13.7 billion in cash to acquire Whole Foods Market.
The two companies will merge but Whole Foods stores will continue to operate independently, with co-founder John Mackey retaining his role as CEO. The move instantly gives Amazon almost as many stores as Apple.
Amazon’s push into the grocery market came in 2007, when the retail giant launched AmazonFresh. Its acquisition of Whole Foods greatly expands its food business, and serves customers who cannot wait for goods to be delivered to their home.
“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 Amazon CEO Jeff Bezos. “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.”
Whole Foods ranked number 28 on Fortune’s list of World’s Most Admired Companies for 2017. Amazon is paying $42 per share in an all-cash transaction for the company, which is 27 percent higher than the closing price on Thursday. It’s Amazon’s largest acquisition since it purchased Zappos, an online clothing retailer, for around $1.2 billion in 2009.
The deal is expected to be completed during the second half of this year. Mackey is keen to stress that it is a “partnership” as opposed to a complete takeover, and Whole Foods stores will continue to operate as normal. The company’s headquarters will remain in Texas.
“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,” Mackey said.
Although Whole Foods will carry on as normal, we will almost certainly see its products available through AmazonFresh, while devices like the Kindle, Fire tablets, and Echo speaker will likely be popping up in Whole Foods stores.
Whole Foods currently operates around 456 stores worldwide, according to the latest data from Statista, while Amazon owns several of its own locations, including a bookstore in Seattle. In comparison, Apple boasts 496 stores across 21 markets. Whole Foods announced the closure of nine locations back in April following its sixth consecutive quarter of declining sales.