Amazon.com Inc.will pay $42per share for Whole Foods Market Inc., including debt.That marks an 18 percent premium to Whole Foods` closing price on Thursday.
Online juggernaut Amazon(amazon.com) is buying Whole Foods in a deal valued at about $13.7 billion, a strong move to expand its growing reach into groceries.
The deal comes a month behind Whole Foods announced a board shake-up and cost-cutting plan amid falling sales.The grocery store operator was also under pressure from activist investor Jana Partners.
Alternate Title: Amazon Bought Grocery Chain for $13.7 and Its High Time Flipkart Should Worry for BigBasket
The grocery chain, known for its organic options, had been facing increased pressure from rivals, including European grocery chain Lidl, which is planning to enter the East Coast market, along with Aldi and Trader Joe`s.
Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment.
Whole Foods will keep operating stores under its name and John Mackey will as CEO, with headquarters in Austin, Texas.
The company, founded in 1978, has struggled to differentiate itself as competitors also now offer a plethora of fresh and organic foods, and has told customers probably choosing "good enough" alternatives closer to home.In addition to other natural and organic grocers, it has cited pressure from restaurant chains, meal-delivery companies and traditional supermarkets such as Kroger.
Amazon to Acquire Whole Foods Market For $13.7 Billion
The deal is expected to close in the second half of 2017.
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