Amazon To Acquire Whole Foods Market For $13.7 Billion

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Completion of the transaction is subject to approval by Whole Foods Market's shareholders, regulatory approvals and other customary closing conditions.

News of the deal sent shares of traditional retailers such as Walmart, Target, Costco and Kroger tumbling as much as 13 per cent as investors tried to digest the implications of an Amazon-backed grocery chain.

Grocery stocks took a hit Friday morning on news of the pending merger agreement. Target Corp.'s stock fell to $50.30, down more than 9 percent. Kroger, which had been rumored late a year ago to be considering a takeover of Whole Foods, fell by 9 percent Friday.

Meanwhile, Whole Foods stock soared on the news, jumping almost 30 percent by mid-morning. It is made out to be an Amazon rival with its market size and current valuation of $3.4 billion.

Some investors may be wondering whether Amazon could disrupt grocery stores the way it upended the bookstore business.

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The Senate is planning to act soon to pass their own bill, which is expected to mirror numerous provisions of the House GOP bill. Senate Republican Marco Rubio said he hoped there would be "plenty of time for debate and analysis" on such a crucial bill.

"We believe it presents an incredible opportunity to take Whole Foods Market's mission and objective to new levels and will create significant value for our stakeholders - including you, our most loyal customers". The Whole Foods purchase would let it expand to many more.

"Amazon is an innovative company and we are excited about our partnership".

This deal points towards Amazon's big focus on the grocery business, especially in the US. But the opening of the first store, which was supposed to happen in March, was delayed because of technical issues, according to the Wall Street Journal. He expects the retailer to keep the Whole Foods stores open and eventually even make grocery deliveries via drone. Whole Foods itself had launched an offshoot chain named after its "365" private label brand in a nod to the popularity of no-frills chains.

Grocery stores, which have low profit margins, have also been competing more intensely when it comes to price.

"For the most part, it's too expensive for me to do all may shopping there", said Mary Funari, a Whole Foods shopper.

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Several have, however rebuked the over-priced "extravagant" reputation of the organic supermarket chain as not being in line with Amazon's vision.

"We are always concerned when there is some loss of brick-and-mortar stores out there", Mullins said after just hearing of the news early Friday.

Other stores are testing out tech-savvy approaches. The store uses sensors to track items as shoppers put them into baskets or return them to the shelf.

Whole Foods has also invested an estimated $36 million in Instacart. These tech solutions are likely to become more common this year, according to the JLL report.

This acquisition makes the online retailer a major player in the brick-and-mortar grocery store arena.

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USA crude fell 3.57 percent to $44.80 per barrel and Brent was last at $47.01, down 3.51 percent on the day. Analysts estimated, on average, that crude stocks fell 2.7 million barrels in the week ended June 9.

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