Amazon has announced that it will acquire upscale grocery chain Whole Foods in an all-cash deal valued at about $13.7 billion, including debt. The agreement calls for Amazon to pay $42 per share of Whole Foods, with both parties expected to finalize the transaction by the end of 2017, pending approval from shareholders and regulators.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," said Jeff Bezos, Amazon founder and CEO. "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."
The companies said that Whole Foods will continue to be headquartered in Austin, Texas, with co-founder John Mackey remaining as CEO. Founded in 1978, the chain employs over 87,000 people and has more than 460 stories in the U.S., Canada and the U.K.
In a statement, Mackey said the 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."
The Amazon deal comes a month after Whole Foods announced changes to its board of directors, as well as cost-cutting measures to address downward sales trends.
On Wall Street, stocks for grocery stores and other major retailers plunged after the Whole Foods deal was announced. Target sank 12 percent, United Natural Foods dropped 20 percent and Kroger sank 14 percent. Walmart dropped five percent and Costco saw a 6 percent dip. Amazon rose 3 percent, while Whole Foods' stock was halted.
The Associated Press contributed to this report.
