Amazon, the Internet’s largest retailer, is getting into the physical supermarket business by agreeing to purchase Whole Foods Market for $42 per share or about $13.7 billion.
Amazon is looking to expand into the grocery business and is paying all cash for the organic grocery chain, which has 460 stores in the U.S., Canada and U.K. Whole Foods reported fiscal 2016 sales of $16 billion.
“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.”
“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.
Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.
NY investment firm Jana Partners took a 9% stake in Whole Foods earlier this year and has been pushing for the company to make changes or sell the company. The influence of Jana has apparently worked.
Completion of the transaction is subject to regulatory approvals and other closing conditions. The deal is expected to close during the second half of the year.
Whole Foods has 8 stores in Manhattan and 2 in Brooklyn. A new store is expected to open in Harlem on July 21.