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Amazon taking over Whole Foods
Posted on Friday, 16 June 2017 14:33
Online retail giant Amazon has signed on the dotted line to acquire Whole Foods Market, the health-conscious grocery store chain headquartered in Texas.
Under the terms of the transaction, the buyer will pay USD 42.00 per share in cash for the business, thereby valuing the company at USD 13.70 billion, including debt.
The offer price represents a 27.0 per cent premium over Whole Foods’ close of USD 33.06 on 15th June, the last trading day prior to the deal being announced.
Completion remains subject to the go ahead from the target’s shareholders, as well as regulatory bodies, and is expected to follow during the second half of this year.
Whole Foods chief executive John Mackey, who is expected to remain in place following the deal, said the takeover would enable the company to generate value for its shareholders.
The firm will continue to operate stores under its current moniker following the transaction.
Whole Foods was first named as a potential target back in November 2016, when people with knowledge of the matter told Bloomberg that one of the group’s largest shareholders had met with activist investors to push for changes, including a possible divestment.
Since then the Kroger Company and Albertsons Companies were named as prospective suitors.
The deal marks the second acquisition to have been announced by Amazon this year; in March it agreed to purchase Dubai-headquartered online diversified retailer Souq.com from shareholders including Naspers and Tiger Global Management for USD 1.00 billion.
Whole Foods was founded in 1980 and now claims to be the world leader in natural and organic foods.
The company operates some 465 stores in North America and the UK.
Whole Foods posted sales of USD 3.74 billion in the second quarter of 2017, up from USD 3.70 billion over the corresponding timeframe in 2016.
Shares in the business were trading up at USD 41.92 as at 10:11 EDT.
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