Amazon to buy Whole Foods for $13.7 billion

Investors are likely anxious that Amazon, once entrenched in the physical grocery store business, will ruthlessly cut prices for food products like it did with books.

Excluding debt, the deal is valued at $13.39 billion, based on 318.9 million diluted shares outstanding as of April 9.

Whole Foods, founded in 1978, has more than 460 stores in the United States, Canada and the United Kingdom, employs 87,000 people and is the leading natural and organic foods supermarket.

The deal is expected to close in the second half of 2017, pending shareholder and regulatory approvals. The turbulence highlights the fear Amazon may disrupt the brick-and-mortar retail world in massive ways.

Amazon spokesman Drew Herdener said plans do not include reducing jobs as the result of the deal and that the company does not plan to automate Whole Foods cashiers jobs with Amazon Go technology.

"We expect this transaction to further accelerate the consolidation within the supermarket space".

"They're doing an wonderful job and we want that to continue", Amazon founder and CEO Jeff Bezos said.

Whole Foods wove its way into the crowded and competitive Dayton grocers market in 2015, with its first Dayton-area store, in Washington 1050 Miamisburg-Centerville Road. Whole Foods Market, which has more than 420 stores in more than 40 states in the US, soared more than 29.1 percent to $42.68.

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Whole Foods shares were halted at $32.77 in premarket trading, while Amazon's shares were up 0.5 percent at $969. Analysts say the Whole Foods footprint and distribution channel could theoretically make 5-minute deliveries a reality.

"From the moment Jana had announced its stake in Whole onslaught of attention from media and banks ensued", Whole Foods' chief executive, John Mackey, said in a Texas Monthly article this month.

Amazon has, in fact, said to have even proposed a $500 million investment to make deeper inroads into the Indian grocery and food business.

As Fortune's John Kell wrote on this very website, the deal is a shot across the bow for Amazon's bitter rival Walmart, the top grocer in the US and No. 1 on this year's Fortune 500.

Amazon stocks rose 2.4 percent to close at $987.71.

$42: Per share price for Amazon's purchase.

Almost $1.5T: Amount spent by Americans on food in a year.

Interestingly, the acquisition of Whole Foods sends several signals to Amazon's Indian market as well.

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