Amazon buying Whole Foods, making strong move into groceries

  • Amazon buying Whole Foods, making strong move into groceries

Amazon buying Whole Foods, making strong move into groceries

"Whole Foods Market has been satisfying, delighting and nourishing customers for almost four decades - they're doing an incredible job and we want that to continue".

The $42 per share offer represents a premium of 27 percent to the upmarket grocery chain's Thursday close.

Amazon c.e.o. Jess Bezo added: "Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy".

Amazon said it will continue to operate Whole Foods stores under that name as a separate unit of the company. The parties expect to close the transaction during the second half of 2017.

Amazon is buying Whole Foods in a stunning move that gives it hundreds of stores across the USA - a brand-new laboratory for radical retail experiments that could revolutionize the way people buy groceries.

It also shows Amazon's growing interest in groceries.

Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said.

Whole Foods has been under pressure from activist investor Jana Partners and money manager Neuberger Berman, which have called on Whole Foods to sell itself.

"The brand is a good compliment to Amazon and would allow them to more aggressively target fresh food delivery to the at-home market", Darren Tristano, chief insights officer at Technomic, told CNBC. Jana had pushed to shake up Whole Foods' board of directors, among other changes.

In Whole Foods, it is acquiring a company that has recently come under pressure from investors for its lagging performance. Before Whole Foods, its biggest deal to date came in 2014, when it agreed to buy video-game service Twitch Interactive for $970 million in cash, according to data compiled by Bloomberg.

Amazon could cut costs if the technology gets good enough to deploy at Whole Foods locations.