SAN FRANCISCO, June 16 (Xinhua) -- Amazon.com, Inc., the world's largest Internet-based retailer, said Friday it will acquire Whole Foods Market Inc., a supermarket chain featuring foods without artificial preservatives, colors, flavors, sweeteners and hydrogenated fats, at a total cost estimated to be 13.7 billion U.S. dollars.
Under a merger agreement between Amazon and Whole Foods, it will be an all-cash transaction, with the former paying the latter 42 dollars per share, and the latter to continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world.
Following the announcement, shares of Whole Foods spiked over 27 percent, while shares of the e-commerce giant rallied 3 percent. The deal is expected to close in the second half of 2017.
"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 chief executive officer (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."
Amazon, headquartered in Seattle, Washington state, started as an online bookstore in 1994 and stands now as the most valuable retailer in the United States by market capitalization.
Backed by its delivery network, it has entered the U.S. grocery market in recent years with limited success under a brand name known as AmazonFresh.
John Mackey, Whole Foods co-founder and CEO, who will keep his position after the merger, said in a statement that "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 will remain as CEO of the grocery store chain after the deal closes, and the store's headquarters will stay in Austin, Texas.
Whole Foods Market is a leading natural and organic foods grocer, but has been widely known for high prices and under pressure from fierce competitions.
Meanwhile, Amazon has been pushing to expand its grocery business, seeing the deal as an emerging opportunity.
However, many large grocery chains took a big hit on the news of this deal. In early Friday, Discount retailers Target and Wal-Mart fell 8.06 percent and 5.13 percent, respectively. Kroger sank 11.48 percent, while Costco dropped 5.64 percent.
Headquartered in Austin, Texas, Whole Foods was founded in 1978 and now has more than 460 stores in the United States, Canada and Britain.
While the transaction is subject to approval by Whole Foods' shareholders, regulatory approvals and other customary closing conditions, the two parties expect to close the deal during the second half of 2017.
