Online heavyweight Amazon.com is entering the brick and mortar sector. The company announced Friday a $13.7 billion deal to acquire Austin-based food retailer Whole Foods Market Incorporated.
“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,” John Mackey, Whole Foods Market co-founder and CEO, said.
Whole Foods was founded in Austin in 1978. The business specializes in “natural” and organic foods.
Jeff Bezos, Amazon founder and CEO, announced Friday Amazon plans to continue Whole Foods’ mission.
“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,” Bezos said.
Following the acquisition, Whole Foods Market will continue to operate under its existing brand, according to the company.
Mackey will remain CEO of the company, which will remain headquartered in Austin.
The definitive merger agreement between the two companies is for a $42 per share all-cash transaction, valued at nearly $14 billion. That includes Whole Food Market’s net debt.
The acquisition is still subject to approval by the market’s shareholders, regulatory approval and other closing conditions.
Whole Foods reports they expect the deal to close later this year.
The merger comes on the heels of an overhaul of Whole Foods’ board last month, according to the New York Times. Five directors were replaced, a new chairwoman was named and a new chief financial officer was brought in.
At the time, the company also laid out plans to improve its operations and reduce costs.
This isn’t the first time Amazon has looked into purchasing Whole Foods, according to the Austin American-Statesman. The company considered an offer last year, but decided not to make an offer at the time.
Whole Foods has 465 stores worldwide and about 87,000 employees.
Amazon is ranked number two on Fortune’s list of world’s Most Admired Companies. Whole Foods Market is ranked number 28.