Amazon is buying Whole Foods in a deal valued at $13.7 billion


  • Amazon to acquire Whole Foods for $42 a share, in a deal valued at $13.7 billion.

  • John Mackey will remain CEO of the grocery store chain.

  • The deal is expected to close in the second half year.

Amazon said Friday it plans to acquire Whole Foods Market for $42 a share, in a deal valued at $13.7 billion.

Whole Foods' John Mackey will remain CEO of the grocery store chain after the deal closes, and the store will continue to operate under the Whole Foods brand.

Amazon's offer represents a 27 percent premium to Whole Foods' closing price on Thursday. The deal is expected to close in the second half year.

"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 said in a statement.

Whole Foods has been under pressure from Jana Partners hedge fund and money management firm Neuberger Berman, which have called on Whole Foods to sell itself. The investors have criticized Whole Foods for its poor performance, and have suggested the chain could be merged with another grocer.

Amazon has been pushing to expand its online grocery business.

Online has been the next frontier for the grocery business. However, very few people purchase their groceries online even as more shoppers switch to buying other goods online.

Shares of Amazon were up about 3 percent following the news.

News that the e-commerce giants buying grocery store Whole Foods sent grocery stocks reeling on Friday.

Kroger sank nearly 16 percent before the bell. Supervalu dropped 11.5 percent while Costco dropped 6.5 percent. Sprouts Farmers sank 9.2 percent.

Jana Partners did not immediately respond to request for comment.

This story is developing. Please check back for further updates.

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