If you ever had any doubts about Amazon taking over the world, rest assured that it's happening. Amazon is coming for your groceries. The company announced Friday morning that they agreed to buy Whole Foods for $13.7 billion, a massive deal that launches the e-commerce site straight into the supermarket business.
It's no secret that Whole Foods has been struggling in the past year. The retailer, which has more than 465 stores, has seen a three percent drop in foot traffic according to Barclays analysts. According to Bloomberg, Amazon had been thinking about making a bid on Whole Foods since last fall.
In this deal, Amazon agrees to pay $42 a share in cash for Whole Foods, which is a 27 percent premium to the stock prices at Thursday's close. According to The New York Times, Amazon stock prices have risen roughly three percent since the announcement, while stock prices of major competitors like Costco and Walmart have declined sharply.
Whole Foods' CEO John Mackey will stay on as leader of the company, and all locations will continue to operate under the Whole Foods name. "This partnership presents an opportunity to maximize value for Whole Foods Market's shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience, and innovation to our customers," explains Mackey in a statement on Friday.
It's a surprise to no one that Amazon would buy Whole Foods. The company has shown an increased interest in grocery in the last few years, shown with Amazon Pantry and Wickedly Prime. Amazon has also talked about experimenting with brick-and-mortar grocery stores this past year.