Amazon's bombshell buyout of Whole Foods could change the grocery industry

Amazon to buy Whole Foods Market in deal valued at $13.7 billion

Shares of dozens of supermarkets, food producers, payment processors and shopping malls collectively lost at least $35 billion in US market value on Friday as the news reverberated across financial markets.

Following the announcement of Amazon's plan to purchase Whole Foods Market, Inc. But in a sign that investors believe a rival bid is likely, Whole Foods shares rose above the offer price to close at $42.68. According to multiple reports, Whole Foods also invested in Instacart. Walmart, the world's biggest retailer that generates more than half of its revenue from groceries, lost more than $11 billion in market value.

Then there's Amazon, the online juggernaut that has turned its gaze to food retailing.

But Whole Foods, which has been feeling the heat to bolster its stock for more than a year, has a new owner with cash to burn, significant technological expertise, and a willingness to invest aggressively in a quest for dominance of a brand new sector.

Amazon has been looking at shop layouts that could allow traditional in-store purchase, online ordering with on-site pickup, and home delivery, using store warehouse space as a distribution point, Ladd said. The online retail giant recently launched a new store called 'Amazon Go.' Located in Seattle, the store replaces cashiers with technology you would normally find in self-driving cars.

And while some analysts expect Amazon to bring vast buying power to Whole Foods, Amazon's heft in the food market is far smaller than in other areas, and high demand for organic products gives farmers unusual bargaining power.

Ryne Misso of the research firm Market Track said a customer who buys fresh fruit regularly at Whole Foods might be offered a deal on blenders and serving bowls. The grocer will continue to operate stores under the Whole Foods Market brand and John Mackey will remain as its chief executive officer, the companies said. It also had announced a board shake-up and cost-cutting plan amid pressure from activist investor Jana Partners.

"I don't know if they do deliveries", she said, referring to Whole Foods.

Excluding debt, the deal is valued at $13.39 billion.

Here's a look at shares of Amazon and Whole Foods over the past year. It has expanded from a book seller into a merchant of almost all consumer products, as well as producing videos. It won't be the big loser once Amazon swallows Whole Foods, Livingston said.

About 450: Number of Whole Foods stores across the country. Earlier this week rumors were swelling that Amazon had its sights on acquiring messaging technology company Slack, turns out it was Whole Foods that would be first.

Convenience. More of our shopping visits are digitally enabled, and this is going to continue to grow. Despite its likely new ownership equation-the deal hasn't yet closed-Instacart is doubling down on its anti-Amazon rhetoric.

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