Amazon to purchase Whole Foods for $13.7 billion

It might be the largest grocery bill on record.

In a bombshell announcement, Amazon has announced its intention to buy Whole Foods for $13.7 billion.

The deal is expected to close later this year, with Amazon taking on Whole Foods’ debt and paying $42 per share. Whole Foods co-founder John Mackey will remain Whole Foods’ chief executive. Its headquarters will also stay in Austin, Texas, where it has called home since 1980.

The acquisition priced caused many Twitter users to make jokes:

I, too, spend $13.7 billion at Whole Foods.

— Slade Sohmer (@Slade) June 16, 2017

Amazon is paying $13.7 billion for Whole Foods Market or roughly the average shopping bill for a cart of groceries at Whole Foods. #Amazon

— Tommy Campbell (@MrTommyCampbell) June 16, 2017

Amazon went into Whole Foods for a sandwich and somehow spent 13.7 billion. Happens to the best of us it seems...

— Matthew Comer (@comerface) June 16, 2017

Jeff Bezos: "Alexa, buy me something from Whole Foods."

Alexa: "Sure, Jeff. Buying Whole Foods now."

Jeff Bezos: "WHA- ahh go ahead."

— Alex Vetter (@tavetter) June 16, 2017

If I had a nickel for all the "Whole Foods is expensive" jokes I've seen today I could probably buy some peanut butter at Whole Foods.

— Liam Boylan-Pett (@liam_bp) June 16, 2017

In an email to customers, Whole Foods wrote:

We want to assure you that Amazon shares Whole Foods Market’s deep commitment to quality and customer service. We will continue to operate our stores and deliver the highest quality, delicious natural and organic products that you’ve come to love and trust from Whole Foods Market.

The move marks Amazon’s commitment to dive further into the grocery market. It already operates AmazonFresh delivery service, and has indicated plans to launch in-store pick-up at Whole Foods.

Amazon has also been expanding into brick-and-mortar stores with the launch of AmazonGo, a grocery store where customers don’t have to wait in checkout lines. Those stores join physical bookstores in Seattle.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Amazon’s founder and chief executive, Jeff Bezos.

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He continued:

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.

The announcement has sent traditional grocery stores and chains such as Target and Walmart scrambling.

CNN Money reported:

The stocks of traditional grocery stores like Kroger were clobbered Friday after the deal was announced. So were Walmart and Target, which made big moves into groceries in recent years and now depend on food for a huge chunk of their sales.

The damage didn't stop there: Food companies themselves, like Hershey and Campbell Soup, also slumped because of investor concerns that Amazon will do for their products what it does for everything else -- cut prices ruthlessly.

Though the news caused trepidation among leaders in the grocery industry, Amazon boosted its presence on Wall Street with the upcoming purchase.

CNN Money reported:

Contrast the grocery carnage on Wall Street with the extreme optimism around Amazon. The e-commerce leader's stock popped another 4% on Friday, lifting its market value to an incredible $477 billion. Whole Foods (WFM) shares spiked 27% to $42, Amazon's offer price.

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