Amazon and organic, upscale food vendors Whole Foods announced a huge, surprising merger Friday morning, as the e-commerce titans will acquire the grocery chain for $13.7 billion in cash. It’s immediately the largest acquisition that Amazon has ever made, the previous high mark having been the $1.2 billion purchase of Zappos in 2009.
Whole Foods will retain its Austin, TX headquarters and its CEO, cofounder John Mackey, who trotted out some of that old corporate lingo to call the acquisition a “partnership” rather than a buyout.
“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,” he said in the press release.
Amazon had already been moving more into the food sector as of late with its AmazonFresh service, so one wonders how they’ll combine their peerless ability to deliver goods to your door with the Whole Foods brand. We may be only months away from being able to get fresh rutabagas delivered to our homes WITHIN THE HOUR.
On the other hand, Amazon is sure to inject some of its own branding into the brick and mortar Whole Foods locations—one would expect to soon see them selling Kindles and Amazon-branded electronics. Regardless, it’s a valuable market for Amazon’s products and services—a built-in target demographic with high earning potential and “cultivated” tastes.