Acquisition Of Whole Foods A Potentially Transformative Transaction For Amazon.com, Inc

On Friday Amazon announced its intention to acquire Whole Foods Market, a supermarket chain with more than 460 stores across the US, Canada and the United Kingdom, for $13.7 billion.

Big Picture: Whole Foods CEO John Mackey might have gone a bit off script in his first remarks since Amazon bought his company, but he didn't share much about what the acquisition actually means.

"Mutual friends set us up on a blind date", he said about flying out to Seattle a little over a month ago.

Amazon's $13.7 billion purchase of Whole Foods Market, the largest acquisition in the Seattle company's history, will give the e-commerce giant a much bigger presence in physical retail, including almost 450 stores across the United States.

USA Today business reporter Zlati Meyer said the deal could combine two giant companies that could disrupt the market, but in a way that could benefit consumers: the competition could force other grocery stores to lower prices. "It is likely that Amazon will utilize Whole Foods to even further expand their private label offering".

Some Wall Street analysts are starting to wonder whether another retailer will come up with a higher offer and start a bidding war for the Whole Foods grocery chain.

Whole Foods, Kroger, Albertsons and Wal-Mart all declined to comment. "I think that where Amazon may add the most value is to speed up the process of perfecting the 365 by Whole Foods model and scaling it quickly thanks to its greater resources". About a year and a half ago, I dreamed that we merged with Amazon. And- it- we just fell in love.

Peter Arroyo, manager of Gristedes, had more on his mind regarding the Amazon-Whole Foods deal, which he predicted will "screw up the industry in all aspects", said Arroyo.

Amazon, which is now focused on food delivery following the Whole Foods deal, could leverage GrubHub's delivery infrastructure in its grocery-delivery efforts, the analyst noted. "I think we could have talked for 10 hours", Mr. Mackey said at the town hall.

While Mackey insisted Whole Foods would keep commitment it high-quality, natural and organic foods, he also said that there could be spinoff retailers and brands that wouldn't necessarily play by the same rules.

Whole Foods is part of the "crème de la crème of the supermarket industry" and is a "hand-in-glove fit" with the educated, relatively affluent demographic of Amazon customers who pay $99 a year for the site's Prime membership that includes free shipping, video streaming and other services, Greif said.

  • Zachary Reyes