Amazon to Buy Whole Foods for $13.4 Billion -<br />By NICK WINGFIELD and MICHAEL J. de la MERCEDJUNE 16, 2017<br />Amazon agreed to buy the upscale grocery chain Whole Foods for $13.4 billion, in a deal<br />that will instantly transform the company that pioneered online shopping into a merchant with physical outposts in hundreds of neighborhoods across the country.<br />If the deal goes through, Amazon and Whole Foods will still only account for about 3.5 percent of grocery spending in the United States,<br />making it the country’s fifth-largest grocery retailer, according to estimates by John Blackledge, an analyst at Cowen & Company.<br />For Whole Foods, the deal represents a chance to fend off pressure from activist investors frustrated by a sluggish stock price as it has faced fierce competition from Costco, Safeway<br />and Walmart, which have begun offering organic produce and kitchen staples, forcing Whole Foods to slash prices.<br />The $13.4 billion deal, which does not include net debt, immediately raised questions about whether Amazon’s experiments with automation, like<br />the cashier-less checkout technology it is testing in its Amazon Go store, could eventually lead to job losses at Whole Foods stores.<br />Buying Whole Foods also represents a major escalation in the company’s long-running battle with Walmart, the largest<br />grocery retailer in the United States, which has been struggling to play catch-up in internet shopping.<br />“That is the reality today at Amazon, and it will no doubt become the reality at Whole Foods.”<br />Drew Herdener, a spokesman for Amazon, said it has no plans to use the Amazon Go technology to automate the jobs of cashiers at Whole Foods<br />and no job reductions are planned as a result of the deal.
