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Amazon acquiring Whole Foods in a whopping $13.7bn all-cash deal

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Amazon acquiring Whole Foods in a whopping $13.7bn all-cash deal
16 Jun 2017
  • Tech giant Amazon is acquiring US supermarket chain Whole Foods Market in a $13.7 billion all cash deal - the biggest transaction ever for the e-commerce player.
  • Sending shockwaves across both online and offline sectors, Amazon will reportedly pay $42 per share in cash for the organic food chain.
  • Whole Foods' Co-founder & CEO John Mackey will continue to run the business.

  • Deal shows Amazon's financial might
    Amazon's deal to acquire Whole Foods demonstrates its financial might. The market value of the Jeff Bezos-led company is higher than that of the 12 largest traditional retailers combined. As of March 2017, Amazon had $21.5bn of cash and equivalents.

    Details about Whole Foods
  • Whole Foods Market is a US supermarket chain that produces organic food items.
  • It was founded by John Mackey and Walter Robb and is the first certified American organic grocer.
  • It was opened on 20 September 1980 in Texas's Austin which is its headquarters.
  • As of Sep'15, it had 91,000 employees across 431 supermarkets in the US, Canada, and the UK.

  • Amazon previously contemplated a takeover of Whole Foods
  • The deal between Amazon and Whole Foods Market came as a surprise as the two brands were not seen as obvious partners.
  • The acquisition deal is expected to be completed in the second half of 2017.
  • The headquarters of Whole Foods would remain in Austin, Texas.
  • Amazon earlier contemplated an acquisition of the supermarket chain last year but did not pursue a deal.

  • Jana Partners' entry put Whole Foods under pressure
    Whole Foods was under pressure to find an acquirer after activist investor Jana Partners acquired a stake and started pushing for a deal, irking John Mackey. Trading in Whole Foods Market was stopped ahead of the deal's announcement.

    Amazon's interest to push deeper into grocery business
  • The deal values the supermarket chain at $42 a share, which is 27% higher than where the stock was last trading.
  • It shows the e-commerce giant's interest in foraying into brick-and-mortar businesses despite the fact that its growth crippled many offline stores, forcing them to shut down.
  • Amazon's interest in groceries is growing; it has its own delivery service called 'AmazonFresh'.

  • Amazon's biggest acquisition till date
    According to Bloomberg, Amazon's biggest acquisition till date, was in 2014 when it bought the video-game service Twitch Interactive for $970 million in cash.

    Meanwhile, Amazon grocery stores to come to India
  • According to reports, Amazon has sought permission from the government of India to open its own chain of grocery stores in the country.
  • The project, called "Project Everest" will see the first store in India open in Bengaluru. Amazon recently promised $500 million in investments in India's food-retail sector.
  • Amazon said they would "partner with the government in achieving this vision."

  • This post first appeared on NewsBytes: Latest News, Breaking News India, Today News, Current News, please read the originial post: here

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    Amazon acquiring Whole Foods in a whopping $13.7bn all-cash deal


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