Whole Foods Market will retain its headquarters in Austin, Texas, and John Mackey will remain CEO. The retailer will continue to operate stores under the Whole Foods Market brand and source from established vendors and partners around the world, the company said.
The transaction is expected to close during the second half of 2017 and is subject to approval by Whole Foods Market shareholders, regulatory approvals and other customary closing conditions.
For Amazon, the deal would expand the e-commerce giant’s footprint into brick-and-mortar retail. It has been rumored for some time that Amazon has been considering different retail formats with a focus on consumer packaged goods.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, founder and CEO of Amazon. “Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”
In April, Whole Foods Market shares jumped 10 percent in one day following news that investor Jana Partners LLC had acquired an 8.3 percent share in the natural grocery chain. In a filing with the Securities and Exchange Commission Jana Partners said it intends to push the company’s board of directors and management to consider strategic options, such as a potential sale.
Beleaguered by heightened competition and six quarters of same-store sales declines, Whole Foods had recently cut its full-year sales and profit forecast and revealed plans to close 9 of its 469 stores this quarter. At the end of last year, Whole Foods co-CEO Walter Robb departed the company, as co-founder John Mackey became the sole CEO.
Of the Amazon deal, Mackey said, “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.”