Amazon to Buy Whole Foods for $13.4 Billion -
By NICK WINGFIELD and MICHAEL J. de la MERCEDJUNE 16, 2017
Amazon agreed to buy the upscale grocery chain Whole Foods for $13.4 billion, in a deal
that will instantly transform the company that pioneered online shopping into a merchant with physical outposts in hundreds of neighborhoods across the country.
If the deal goes through, Amazon and Whole Foods will still only account for about 3.5 percent of grocery spending in the United States,
making it the country’s fifth-largest grocery retailer, according to estimates by John Blackledge, an analyst at Cowen & Company.
For Whole Foods, the deal represents a chance to fend off pressure from activist investors frustrated by a sluggish stock price as it has faced fierce competition from Costco, Safeway
and Walmart, which have begun offering organic produce and kitchen staples, forcing Whole Foods to slash prices.
The $13.4 billion deal, which does not include net debt, immediately raised questions about whether Amazon’s experiments with automation, like
the cashier-less checkout technology it is testing in its Amazon Go store, could eventually lead to job losses at Whole Foods stores.
Buying Whole Foods also represents a major escalation in the company’s long-running battle with Walmart, the largest
grocery retailer in the United States, which has been struggling to play catch-up in internet shopping.
“That is the reality today at Amazon, and it will no doubt become the reality at Whole Foods.”
Drew Herdener, a spokesman for Amazon, said it has no plans to use the Amazon Go technology to automate the jobs of cashiers at Whole Foods
and no job reductions are planned as a result of the deal.