The organic grocer, which was founded in 1978 and currently has more then 430 retail locations, would continue to operate under its existing brand. Whole Foods chief executive John Mackey would remain CEO after the purchase and the company would keep its headquarters in Austin, Texas. The merger offers a test of whether Amazon, which has generally built its business on low prices, can successfully integrate a grocer known for premium service and higher prices.
The price which equals to $42 a share, is a 27% premium above Whole Foods Market closing price on Thursday, so investors are probably happy, since the whole Foods stock has not been doing to well in recent years, since many retailers such as wal mart have increased their organic product lines.
Should we expect to start getting our Whole Foods delivered by drone soon? Maybe, but with amazon going for total retail domination it might not just be Whole Foods the drones will deliver, expect to see other acquisitions in the future.
In addition to the built-in advertising power of storefronts, Amazon will also gain an established perishable supply chain and sourcing operation, something its Amazon Fresh grocery division has struggled with, according to Keith Anderson, senior VP-strategy and insight at e-commerce analytics firm Profitero. He added that Whole Foods’ locations, primarily in coastal states with affluent shoppers, will also offer a new advantage. In addition, the digital innovations of Amazon Go, still in infancy, could come into play soon in Whole Foods locations.