Also, Amazon's status as a public cloud leader, with Amazon Web Services, can help Whole Foods accelerate delivery and potentially widen its customer base through its other business lines, supported by Amazon's Prime membership program that offers customers access to a variety of company-specific services and deals.
The $13.7 billion deal is Amazon's biggest acquisition of all time and the 11th biggest global-retail deal ever, Thomson Reuters said. The online retailer will pay $42 per share in an all-cash transaction that also includes the supermarket's debt.
"I think that this takes all of the pressure off Whole Foods and gives Whole Foods the opportunity to revitalize that business and, of course, it stems the criticism from all of these activist investors", said Neil Saunders, managing director of GlobalData Retail in NY. It operates approximately 456 stores in the United States, Canada, and the United Kingdom.
Major U.S. indexes are slightly lower in midday trading on Wall Street, but grocery stores and other retailers are plunging after Amazon said it would buy Whole Foods.
Small-company stocks fell more than the rest of the market.
Amazon's $13.7 billion acquisition of Whole Foods could mean big changes for the way people buy groceries - and just about everything else. (NASDAQ:WFM), shopping center REITs tumbled more than their peers in the real estate sector.
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The company has experimented with fresh food delivery for years with Amazon Fresh. He expects the retailer to keep the Whole Foods stores open and eventually even make grocery deliveries via drone.
"We believe AMZN can work to transform the physical retail experience". Jana had pushed to shake up Whole Foods' board of directors, among other changes.
"This could be the tipping point of the food tech movement, merging a sizable 440-store chain with the leading online retailer", Wank said.
The deal gives tremendous impetus to two avenues Amazon has been pursuing: brick-and-mortar stores and grocery retailing.
News of the deal sent shares of rival grocers plummeting as investors tried to digest the implications of an Amazon-backed grocery chain.
Ryne Misso of the research firm Market Track said a customer who buys fresh fruit regularly at Whole Foods might be offered a deal on blenders and serving bowls. "We believe it presents an incredible opportunity to take Whole Foods Market's mission and goal to new levels and will create significant value for our stakeholders - including you, our most loyal customers". General Mills dipped $1.64, or 2.8 percent, to $57.19. The stock is up more than 31% so far this year. Whole Foods had been the target of sale rumors for about two months, and investors appeared to wonder Friday if another bidder may step in. Year-to-date, the stock is up almost 39%.
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