In its biggest acquisition till date, e-commerce giant Amazon is set to buy fresh foods supermarket chain Whole Foods, for $13.7 billion. The announcement which was made on Friday will add to the growing competition between Amazon and Walmart.
John Mackey the present CEO of Whole Foods will remain as the head even after the deal is closed in the second half of the year. Shares of Whole Foods increased by 28% because of this announcement as Amazon plans to acquire the grocery store for $42 a share. Whole Foods supermarket chain has a sales value of $16 billion in the last fiscal year and more than 460 stores in the United States, Canada, and Britain.
Amazon has been interested in selling groceries online for almost a decade and had started Amazon Fresh but failed to make any impact in the grocery sector. In Seattle, Amazon has also opened two drive-through grocery stores for customers to pick up online orders. Amazon Go was also launched this year that uses sensors and software to allow customers to buy and exit without waiting at the cashier by charging their Amazon accounts directly.
Amazon added $11 billion to its market capitalization as its shares rose post announcement by 2.4% to $987.71. Amazon spokesman Drew Herdener said that the deal does not involve reducing the number of Whole Foods employees neither are they going to replace the cashiers with Amazon Go technology.
According to Reuters, Goldman and Sachs Group Inc., along with Bank of America Corp provided bridge financing and advice to Amazon. Evercore Partners Inc. advised Whole Foods on the acquisition deal.
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May 25, 2025 at 3:38 am
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