Amazon is buying Whole Foods Market for $42 a share in an all-cash transaction valued at about $13.7 billion, including Whole Foods Market’s net debt. The purchase value is at a 27 percent premium; Whole Foods shares closed at about $33 on Thursday, June 15.
“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,” said John Mackey, Whole Foods Market co-founder and CEO. Mackey will remain CEO of the banner after the acquisition, which is expected to close in the second half of 2017. The stores will continue to operate under the Whole Foods banner and headquarters will remain in Austin, Texas.
“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 and CEO. “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, which has seen a decline in sales performance recently, had been under continued pressure to sell or merge with another grocery chain after Jana Partners acquired an 8 percent share of the company. In fiscal 2016, Whole Foods has sales of about $16 billion and has more than 460 stores in the United States, Canada and the United Kingdom.
Amazon has been making a push into the grocery industry, announcing in October that it planned to open bricks-and-mortar stores. Its Amazon Go currently operates in Seattle, Wash., with no checkout stand. Customers scan items as they shop the 1,800-square-foot store that offers ready-to-eat options and grocery staples.