(Source: Fung Global Retail & Tech)
On June 16, Amazon announced the signing of a definitive agreement to acquire Whole Foods Market for $13.7 billion in cash, which includes the assumption of roughly $1 billion in Whole Foods’ net debt.
The two companies’ statement included few details. Whole Foods CEO John Mackey said that the deal represents an opportunity for Whole Foods to maximize value for shareholders while “extending [its] mission and bringing the highest quality, experience, convenience and innovation to [its] customers.” Whole Foods will continue to operate under its own brand and Mackey will remain with the company.
The transaction, which is expected to close in the second half of 2017, requires approval by Whole Foods’ shareholders as well as by regulatory bodies and is subject to other customary closing conditions.
Creating an E-Commerce/Brick-and-Mortar Powerhouse
Whole Foods will bring $16 billion of grocery sales to Amazon. According to Euromonitor International, the chain was America’s eighth-largest grocery retailer in 2016. Amazon’s grocery sales were estimated to be $350 million in the first quarter of 2017, according to OneClickRetail.com; that equates to $1.4 billion in annual sales.
Amazon’s Acquisition History
The Whole Foods acquisition would be Amazon’s largest to date. The company’s acquisitions have averaged $520 million (excluding Whole Foods), based on the available data. Amazon has averaged about 4.5 acquisitions per year over the past seven years. A table of selected acquisitions is below.
–from Fung Global and Tech Report
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