Amazon Is Buying Whole Foods For $13.4 Billion
According to reports on Friday, Amazon is set to buy Whole Foods for the staggering price tag of $13.4 billion. The purchase marks the mammoth online retailer's expansion of its reach into fresh territory.
The move comes amid some turnover and tumult for the premium supermarket chain, according to The New York Times. Whole Foods recently suffered a disappointing stock performance and a change up of its board of directors that included replacing five directors, installing a new chairwoman, and hiring a new chief financial officer, the Times reported.
Amazon founder and CEO Jeff Bezos won't be running the supermarket chain directly, to be clear ― longtime (and controversial) Whole Foods CEO John Mackey will reportedly stay in his current role after the acquisition.
But as for Bezos, this simply adds another element to his involvement in a broad swath of different sectors of the business landscape. Notably, in addition to running Amazon and now making this foray into grocery stores, he's also the owner of The Washington Post, where he's turned around the longtime paper's once-struggling business model and established himself as a powerful player in the world of journalism.
What precisely this will mean for how both Amazon and Whole Foods do business not yet clear, but it's not hard to imagine just how big an impact it could have.
Theoretically, bringing a massive chain of top-end supermarkets under the Amazon umbrella could allow the website to streamline online grocery delivery in a major way, something it's already dipped its toes into in recent years by way of Amazon Fresh.
Whole Foods, for its part, has been around for nearly 40 years ― it was founded in 1978 ― and despite criticism over its high price tags, it remains a strong brand name, and one which you could easily imagine Bezos and Amazon doing a lot with. There's no way to predict how worthwhile this new pairing will be until it's all wrapped up, but it's been well-received by the market.
At the time of this writing, the price of Whole Foods stock had jumped 27 percent since the news of the acquisition broke on Friday morning, meaning people were clearly a little more eager to become shareholders following this major announcement. What has been Whole Foods' gain has proven to be the rest of the industry's loss, however; stocks for other supermarket chains reportedly plummeted at the news, reflecting uncertainty about what the move will mean for Whole Foods' competitor brands.