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Amazon to buy bricks and mortar grocer for US$13.7 billion

SEATTLE: June 16, 2017. Amazon has agreed to buy Texas-based Whole Foods Market (WFM) for US$13.7 billion including debt.

WFM reported Q2 2017 net sales of US$3.7 billion and an adjusted EBITDA of US$316 million. Net income for the 12 weeks ending April 09 was US$117 million, down from US$142 million in the same period last year. The company reported sales of US$15.7 billion in 2016.

Earlier this year Jana Partners purchased over eight percent of Whole Foods and forced changes in the company's board of directors.

Amazon grocery salesLast month WFM co-founder John Mackey reportedly told Texas Monthly magazine that while "we need to get better" he claimed the hedge fund was a "greedy bastard" that "just want to sell us, because they think they can make forty or fifty percent in a short period of time.

"These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I'm going to resist that," Mackey declared.

Assuming shareholder approval of the US$42.00 share price, Jana Partners is set to make an estimated US$1.1 billion when the deal is expected to closes.

Amazon said the Whole Foods Market brand will continue and co-founder John Mackey will remain CEO: "This partnership presents an opportunity to maximize 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," Mackey commented.

eCommerce analyst One Click Retail said Amazon saw its grocery sales increase an average 30 percent across the US, UK and Germany in Q1 2017 to total around US$400 million.

"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," declared Amazon founder and CEO Jeff Bezos. "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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