Amazon gets Whole Foods' yes

Shareholders favor $13.7B tie-up; U.S. won’t stand in way

Whole Foods’ hundreds of stores, including the one shown here in San Antonio in June, will be under the umbrella of online giant Amazon after Whole Foods shareholders approved the merger.
Whole Foods’ hundreds of stores, including the one shown here in San Antonio in June, will be under the umbrella of online giant Amazon after Whole Foods shareholders approved the merger.

NEW YORK -- Whole Foods shareholders voted Wednesday to approve a $13.7 billion union with Amazon that the organic grocery chain's chief executive had called "love at first sight."

That approval is one step required to close the deal, which is a bold move into retail stores for Amazon and has the possibility of making big changes to the supermarket industry and online grocery ordering. The deal also needs the go-ahead from government regulators.

The Federal Trade Commission said Wednesday that it will not block Amazon's takeover bid.

The agency said that it had investigated to see whether the deal would substantially lessen competition or constitute an unfair method of competition, and decided not to pursue the matter further.

By buying Whole Foods, Amazon will get more than 460 stores and potentially very lucrative data about how shoppers behave offline.

Rivals are scrambling to catch up with the e-commerce giant. Wal-Mart, for example, is expanding its grocery-delivery service with ride-hailing service Uber and announced Wednesday that it will join forces with Google to let shoppers order goods by voice on Google devices.

The deal also may breathe new life into Whole Foods, which had been under intense shareholder pressure to improve results and retain customers who have more choices about where to get natural foods. As Whole Foods grew, more supermarkets offered similar organic and natural foods, but at lower prices.

Amazon and Whole Foods have not given many details about what might change for customers, though Whole Foods Chief Executive John Mackey gave some general clues at a meeting with employees after the deal was announced. He said he thought Amazon would help with efforts on cost-cutting and a loyalty program. He noted Amazon is known for its innovation and said the company could turn Whole Foods from "the class dunce" to "valedictorian."

Mackey had said the deal came about after a "whirlwind courtship" and that "it was truly love at first sight."

As part of the deal, Amazon will pay Whole Foods shareholders $42 for each share. That was an 18 percent premium from its stock price the day before the tie-up was announced on June 16. Shares of Whole Foods Market Inc. were trading at $41.72 on Wednesday.

Earlier this month, Amazon sold $16 billion of bonds in order to pay for Whole Foods. Seattle-based Amazon has said it expects the deal to close before the end of the year.

There has been opposition to the acquisition by critics of the company and some members of Congress.

On Wednesday, the United Food and Commercial Workers International Union renewed its criticism of Amazon, asking the Whole Foods board and shareholders to guarantee protections for workers' jobs and salaries after the deal.

The union, which represents grocery workers, said the deal was "a threat to Whole Foods workers and their families."

Information for this article was contributed by The Associated Press and by Matt Day of The Seattle Times.

Business on 08/24/2017

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