Early this morning (June 16) Amazon announced that it has agreed to purchase Whole Foods Market. The stunning move will cost Amazon $13.7 billion. In pursuing its largest acquisition ever, the Seattle-based online retail giant will pay $42 per share in an all-cash deal. That's 27% higher than Whole Foods' Thursday closing stock price of $33.06.
This move coincides with Amazon's latest efforts to get into the brick-and-mortar store business. They have already opened a string of bookstores in the last year, and now they are on their way to owning a massive super market empire.
While the move still needs to be approved by Whole Foods shareholders, it is expected to gain full approval by late 2017.
In the grocery realm, Amazon has opened to "click and collect" stores in Seattle where customers can order online and then drive through to have their groceries loaded directly into their cars at a predetermined time. It also has a concept Amazon Go store near its headquarters in downtown Seattle where customers don't have to check out at all, sensors and cameras automatically charge consumers for items they pick up and carry out.
In addition, its Amazon Fresh grocery delivery service, is available for $14.99 a month in selected markets. But acquiring Whole Foods, with its 450 stores nationwide, represents a dramatic departure from its early business model founded on online retailing and related technology.