The world’s largest online retailer is growing rapidly in US food retailing: Amazon offers 42 US dollars per share for Whole Foods Market, an overall value of $13.7 billion. With its largest acquisition to date, Amazon is stepping up pressure on its rivals in the US: it is a clear reference to plans for an empire from online and offline business. Investors steamed billions away at the exchange value of their competitors.
The shares of Whole Foods Market were initially exposed to trading. When the trading of the papers began again, they made a leap forward: in the first minutes the Whole Foods shares rose to a good 42 dollars. This corresponds to the offer per share of Amazon. On Thursday the papers had closed at around 33 dollars. The shares of Amazon can grow in the first trading minutes by about three percent.
In the last few years, Amazon had put pressure on the stationary retail trade, among other things with cheaper prices. In the food business, the online retailer inter alia launched the Amazon Fresh service, which recently also launched in Germany. The Group, however, recently showed an increasing interest in the retail store business. For example, Amazon opened several book stores in the US and also plans for small high-tech supermarkets that can be run by a few employees.
COURSE REACTIONS IN EUROPE
The announced takeover on Friday brought the industry in turmoil. The share prices of large trading chains on both sides of the Atlantic fell partly by double-digit percentage. The shares of the world’s largest supermarket operator Walmart based in the USA fell by about 5 percent last; The shares of US competitors Kroger , Target and Costco even slipped by more than 10 percent.
Shock waves were also noticeable on the international stage: The Dutch company Ahold lost some nine percent at a time, the Carrefour stock fell by more than three percent and the British competitor Sainsbury temporarily by four percent. The share of the German METRO Group fell by about 1 percent.
WHOLE FOODS WITH 461 SUPERMARKETS
Whole Foods Market operated according to recent figures from the spring 461 food supermarkets. Of these, 440 were traded in the United States, another 12 in Canada and 9 in Great Britain. The company, founded in 1978, specializes in high-quality and correspondingly expensive foodstuffs.
FINANCIAL INVESTOR MADE PRINT ON WHOLE FOODS
The financial investor Jana Partners was recently unhappy with the business development at Whole Foods and had pushed the company to a sale. Whole Foods had increased its sales by just one percent to just under $ 3.74 billion in the past quarter, with a year-on-year decline of $142 million to $99 million. In the US, a good 97 percent of the revenues are generated.
JOHN MACKEY STAYS AT THE TOP OF WHOLE FOODS
The co-founder and chief John Mackey is also to remain under the umbrella of Amazon at the top of the chain. He recently described Jana Partners as “greedy” in an interview and assured them that they would not get control of the company. The stores should work under the previous brand, stressed Amazon.
For the online retailer it is by far the largest acquisition of its history after the purchase of the platform Twitch specialized for streaming video games for around one billion dollars. According to market analyst Neil Wilson from the ETX Capital, the planned takeover has an immense importance for the US retail sector. It underlined the enormous change in the industry, triggered by Amazon’s business model. The company appears to be ready to dominate the food sector as well as the non-food sector, Wilson said.
The Group makes the lives of its competitors much more difficult by its size advantages and its price power. However, Amazon could gradually become a case for the cartel authorities, Wilson warned. It may be only a matter of time before Washington is going to attack the increasing power of Amazon.
