Amazon.com Inc. (
NASDAQ: AMZN,
Forum) is acquiring
Whole Foods Markets Inc. (
NYSE: WFM,
Forum) in a US$13.7 billion deal, a move that is expected to spark more competition in the grocery sector, and may prove transformative for retail in general.
Amazon will pay US$42 a share in cash for the organic-food chain, the companies said Friday.
Shares of other grocery chains slumped in morning trading Friday as investors reacted to news of the deal. In Canada,
Loblaw Companies Ltd. (
TSX: T.L,
LBLCF,
Forum) was down 2.7% to $73.46.
Amazon offers grocery-delivery services in five markets. The Whole Foods purchase would allow it to expand into many more.
The deal has the possibility to be transformative, Moody’s retail analyst Charlie O’Shea told The Associated Press. He said that could be true not only for food retail, but also for retail in general.
O’Shea was referring to the likelihood that Online delivery of groceries will soon be more widely accepted by consumers.
John Mackey, Whole Foods’ co-founder and chief executive officer, will continue to run the business.
More information can be found
here.