Amazon on Friday announced it is buying Whole Foods in its biggest deal by far: one valued at about $13.7 billion, including debt, reports the AP. Amazon will pay $42 per share of Whole Foods in a deal that is targeted to close in the second half of 2017. Bloomberg reports Amazon's biggest acquisition thus far was its $970 million purchase of video-game service Twitch Interactive in 2014. As of the end of March, Amazon had about $21.5 billion in cash and equivalents. More:
- Amazon founder Jeff Bezos issued a statement that gives little insight into the buy: "Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades—they’re doing an amazing job and we want that to continue."
- Wall Street Journal financial editor Dennis Berman's take, per Twitter: "Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does."
- Per the press release, there won't be much boat-rocking at the outset: Whole Foods co-founder and CEO John Mackey will stay on as CEO; the headquarters will remain in Austin, Texas; and Whole Foods Market will continue to operate stores under the Whole Foods Market brand.
- In the June issue of Texas Monthly, Mackey had this to say about Jana Partners, the hedge fund that in April revealed its 9% stake in Whole Foods and called for the company to make drastic changes or even sell itself: "These guys just want to sell us, because they think they can make 40% or 50% in a short period of time. They're greedy bastards."
- The magazine notes the April surprise was preceded by a November one: The co-CEO structure that saw 25-year Whole Foods veteran Walter Robb serve alongside Mackey for 6 years was being eliminated. It writes, "Mackey ... had acted less as a traditional executive and more as a kind of spiritual leader, with Robb handling more of the day-to-day matters. By January, the founding-father-philosopher was running things alone, which made some investors nervous."
- The news comes a day after Bloomberg reported that Amazon was eyeing another acquisition: corporate messaging startup Slack, worth an estimated $9 billion or more.
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