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Amazon to buy Whole Foods for $28.30b

Reuters
Monday, June 19, 2017

AMAZON.COM Inc said on Friday it would buy Whole Foods Market Inc for $13.7 billion ($F28.30b), in an embrace of brick-and-mortar stores that could turn the high-end grocer into a mass-market merchant and upend the already struggling US retail industry.

Amazon used aggressive pricing to become an e-commerce retail juggernaut and has recently been experimenting with brick-and-mortar outlets. It will take over a natural and organic grocer pioneer with 456 stores, a mecca for young, high-end shoppers, that has been struggling to rein in prices and integrate technology.

The deal represents a dramatic turn in strategy for Amazon, which has offered food delivery through its Fresh service for a decade but has not made a major dent in the $700 billion grocery market.

Shares of dozens of supermarkets, food producers, payment processors and shopping malls collectively lost at least $35 billion in US market value on Friday as the news reverberated across financial markets.

Amazon's shares rose 2.4 per cent to $987.71, adding $11 billion to its market capitalisation, which in one sense makes the acquisition nearly free for Amazon shareholders.

Amazon agreed to pay $42 per share in cash for Whole Foods, a 27 per cent premium on the Austin, Texas-based grocer's closing share price on Thursday.








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