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What Is The Difference Between Amazon And Whole Foods Merger

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What Is The Difference Between Amazon And Whole Foods Merger
One of the world events related to business is ‘Amazon and Whole foods merger and acquisition’.
Amazon- Whole food acquisition is the retailer’s biggest acquisition ever. Amazon and Whole Foods announced the agreement on June 16, 2017. Amazon (AMZN) and Whole Foods Market, Inc. (WFM) entered into an ultimate merger agreement where Amazon paid $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt. Amazon, which is sitting on $21.5 billion in cash, has long avoided big takeovers. In 2009, purchase of online shoe retailer Zappos.com and video game streaming site Twitch in 2014 at respectively $1.2 billion and $1 billion are the company’s leading acquisitions Reasons for buying …show more content…
“They’re not really competitors. Add to that the fact that Whole Foods doesn’t have the dominant positioning it did even a few years ago, and that makes it even more likely for this deal to go through.”
Impact of this acquisition
Many analysts believe that the Amazon-Whole food merger will provide opportunities for trucking and logistics companies across the country. Amazon intends to use 460 stores of Whole food as warehouse and distribution centers for delivery.
Additionally, Amazon has gained access to a key resource by this acquisition that is temperature- controlled distribution warehouse. This was not available before this deal. So they could not transport frozen and refrigerated products. Through this merger Amazon has taken this opportunity.
The synergies with Amazon’s technology are vibrant. "Amazon has an opportunity to give Prime members automatic entry in a new Whole Foods benefits program," says Brent Franson, CEO of retail analytics firm Euclid Analytics. "They could also offer the option to pay for groceries using the Amazon app, or sync your Alexa-made grocery list with your app while in-store.”
There are also negative impacts according to some …show more content…
Besides, Amazon can distribute its private label food business at Whole Foods, while Whole Foods brands can be sold through Amazon's website. An incredible amount of economic power is now concentrated in Amazon, Inc., and investors now believe it is stifling competition in the retail sector and the broader American economy. Its broader economic impact may be limited to the ongoing transformation of the retail sector toward online shopping and less on overall
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