Home news Whole Foods shareholders back Amazon deal

Whole Foods shareholders back Amazon deal


Amazon’s plan to buy grocery chain Whole Foods for $13.7bn (£10.7bn) cleared an initial hurdle on Wednesday, as shareholders of the supermarket voted in favour of the deal.

Shareholder approval had been expected for the bid, which some have called a game-changer for the US grocery sector.

The merger would combine Whole Foods’ store network with Amazon’s delivery expertise.

The US Federal Trade Commission also cleared the deal on Wednesday.

The FTC said it had considered whether the takeover would substantially lessen competition and decided not to investigate further.

Whole Foods approached the e-commerce giant about a merger this spring, as it grappled with falling sales and pressure from investors such as Jana Partners to improve performance.

Amazon initially offered $41 per share, eventually settling on $42. The $13.7bn value includes Whole Foods’ debt.

The pressure from Jana led six other companies to express interest in a partnership.

But Whole Foods chief executive John Mackey, who plans to stay on, told employees in June that with Amazon – which has deep pockets and a history of putting long-term growth ahead of quarterly profits – it was “love at first sight”.

Whole Foods has said it expects the deal to close by the end of the year.

The deal allows Amazon to leap into the food industry, an area that it has been experimenting with for years.

It also gives the e-commerce firm an instant bricks-and-mortar network with Whole Foods’ 470 stores in the US, Canada and the UK.

That matters because customers still prefer to shop in person, said Miriam Burt, a retail analyst at Gartner.

“For almost all categories of products besides books, music and videos, our research is telling us that customers still prefer to go into the store and interact with the products,” she said.

Ms Burt predicted that most grocery stores would eventually develop a hybrid model of online ordering and in-store pick-up.

Walmart, one of the biggest food retailers in the US, said it was moving in that direction on Wednesday, as it said its products would be available via the voice-activated Google Assistant.

“Each of the major grocery retailers will get to a point where they suggest a use case where you’re driving home from work, you order your groceries online and then you pick it up from your local store. It’s about making the customers’ lives easier,” Ms Burt said.

Source: BBC News