Make us your home page
Instagram

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

Amazon is buying Whole Foods, according to a report Friday morning.
[Times file photo]

Amazon is buying Whole Foods, according to a report Friday morning. [Times file photo]

Amazon said Friday that it had agreed to buy the upscale grocery chain Whole Foods for $13.4 billion, as the online retailer looks to conquer new territory in the supermarket aisle.

For Amazon, the deal marks an ambitious push into the mammoth grocery business, an industry that in the United States accounts for around $700 billion to $800 billion in consumer spending. For Whole Foods, the deal represents a chance to fend off pressure from activists investors frustrated by a sluggish stock price. Amazon is also amplifying the competition with Wal-Mart, which has been struggling to play catch-up to the online juggernaut.

Whole Foods last month unveiled a sweeping overhaul of its board, replacing five directors, naming a new chairwoman and bringing in a new chief financial officer. It also laid out plans to improve operations and cut costs.

With Amazon, Whole Foods gets a deep-pocketed owner with significant technological expertise and a willingness to invest aggressively in a quest for dominance.

Amazon has designs on expanding beyond online retail into physical stores. The company is slowly building a fleet of outlets, and much attention has been focused on its supermarket dreams. It has already made an initial push through AmazonFresh, its grocery delivery service.

The e-commerce giant has been testing a variety of other retail concepts. It has opened a convenience store that does not need cashiers, and has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.

Under the terms of the proposed deal, Amazon would pay $42 a share for Whole Foods, a 27 percent premium to Thursday's closing price.

The company has increasingly experimented with physical stores, opening a small chain of book stores across the country.

But those efforts are nothing compared to the number and size of stores they will acquire through the Whole Foods deal. The grocery chain encompasses more than 460 stores in the United States, Canada and Britain with sales of $16 billion in the last fiscal year.

"The Whole Foods acquisition provides them more physical locations," said Mikey Vu, a partner at the consultancy Bain & Company who leads the retail, technology and digital practices. "They're going to be within an hour or 30 minutes of as many people as possible."

Amazon operates two warehouses in the Tampa Bay region, one in Ruskin and another in Lakeland. Whole Foods Market has three stores in the region, two in Tampa and one in Clearwater. Amazon does not deliver groceries in the Tampa Bay area. Instacart does deliver groceries from Whole Foods in Florida.

Times staff writer Justine Griffin contributed to this report.

Amazon to buy Whole Foods Market in deal valued at $13.7 billion 06/16/17 [Last modified: Friday, June 16, 2017 11:59pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  2. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  3. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]
  4. McDonald's soft serve in Florida is made with handshakes and happy cows

    Consumer

    Floridians licked nine million McDonald's vanilla cones last year.

    Calves play with a rubber toy at the Milking R Dairy in Okeechobee, FL. Owners Sutton Rucks, Jr., and his wife Kris Rucks sell their milk to SouthEast Dairies cooperative, Edward Coryn of Dairy Mix in St. Petersburg buys it, transforms it into soft-serve ice cream base, and sells it to all the McDonald's. SCOTT KEELER   |   Times

  5. Hurricane Irma thrashed Tampa Bay homes sales in September

    Real Estate

    Hurricane Irma not only downed thousands of trees throughout the Tampa Bay area: It also sent home sales plunging in September.

    This home on Tampa's Davis Islands home sold in September for $5.2 million, making it the priciest sale of the month in the Tampa Bay area.
[Courtesy of Judson Brady Photography]