Amazon buys Whole Foods for £10.7billion as internet giant takes on supermarkets
AMAZON is to buy Whole Foods as the internet giant continues to take on the biggest supermarkets, such as Tesco, Sainsbruy's and Walmart in the US.
The internet retailer is set to pay US$13.7billion (£10.7billion) for Whole Foods as Amazon looks to grab a bigger share of the grocery sector.
The companies announced on Friday that Amazon will buy Whole Foods for $42 per share (£32.80), but will continue to operate stores under the Whole Foods brand.
Amazon's acquisition of Whole Foods is just the latest move into the sector, following its launch of AmazonFresh last year and partnership with Morrisons, which allows its customers to order fresh and forzen food from the supermarket.
Whole Foods currently has 460 stores across the US, Canada and the UK, with nine of them in Britain.
Under the Amazon and Whole Foods deal, John Mackey will remain as chief executive of the grocer and maintain its headquarters in Austin, Texas.
Amazon founder and chief executive Jeff Bezos said: "Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy.
"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."
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Amazon's US-listed shares jumped 2.5 per cent as the deal was announced, while Whole Foods stocks surged by 27 per cent.
Commenting on the acquisition, Whole Foods co-founder Mr Mackey said: "This partnership presents an opportunity to maximise 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."The deal will still have to pass regulatory and shareholder approval, but is expected to be completed in the second half of 2017.
Maria Prados, vice president of global retail at Worldpay, said: "Amazon’s move to buy Whole Foods is a clear sign of its intention to disrupt the grocery industry globally.
"From the “Dash” buy button, to the launch of the AmazonFresh service last year, the eCommerce giant has been taking clear steps to build its position in the grocery sector.
"And investing in a physical presence could be the key to Amazon’s success in this space.
“With one in ten Brits now doing all their grocery shopping online*, it is now easier than ever to buy household necessities from the comfort of our sofa.
"We have reached a tipping point in the evolution of the UK grocery market, and it will be interesting to see whether Amazon will continue to focus on their culture of convenience and reliability, or whether they will end up creating a whole new online shopping experience, taking the chore out of the weekly shop.”