The business world was taken by storm today, after Amazon announced that they’re planning to acquire grocery store chain Whole Foods, in a deal estimated at $13.7 billion.
Of course, their shares skyrocketed, as, according to CNBC, going up by 28 percent. It’s also worth mentioning that the retailer’s offer represents a 27 percent premium to Whole Foods’ closing price this Thursday, as the same source claims.
The competition could increase
However, Amazon isn’t the only company interested in this acquisition, since Wal-Mart is also expected to make a bid, as lately, they’ve been focusing on bulking up their digital business. On the other side, they don’t look that interested, according to a statement.
“We feel great about our position, with more than 4,500 stores around the country and fast growing e-commerce and online grocery businesses.”
There’s also JAB Holdings, a private equity player currently interested in restaurants and food and beverages business.
Lately, Whole Foods has been dealing with a lot of pressure coming from activist investor Jana Partners, as well as Neuberger Berman, their money manager. Basically, the board asked the store chain to sell itself, due to poor performance. The variant in which Whole Foods merges with another grocer wasn’t ignored either.
Closing the deal would be beneficial for Whole Foods
“This partnership [with Amazon] 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’ CEO, in an official statement.
If the two companies reach an agreement, John Mackey will remain CEO and the brand will also be kept.
It’s been a while since Amazon is trying to expand its online grocery business and this seems a great opportunity. However, currently, just a small amount of people get their groceries online. To be more specific, we’re talking about 12 percent of U.S. grocery shoppers, according to a study conducted in 2016.