We know with certainty that at some point in the last few weeks, Jeff Bezos woke up, rolled over and said "Alexa, let's bail out John Mackey's crazy ass."
Amazon.com Inc. said it would buy Whole Foods Market Inc. for $13.7 billion as the giant internet retailer makes a deeper push into the grocery space.
Amazon will pay $42 a share for Whole Foods, valuing the grocer at a 27% premium to its closing price Thursday. The deal is by far the largest in Amazon’s history, and it is expected to close in the second half of this year.
It's been awhile since we've seen a major acquisition that makes as much sense as this one. Whole Foods has never really worked as a public company and Amazon is essentially the e-commerce Death Star, moving through the global economy blowing up weaker competitors unready for the new world order and disrupting entire industries through force of will and an eagerness to forgo revenue in favor of domination. Adding Whole Foods and its loyal consumer base (ie white moms in yoga pants willing to fill their Land Rovers with bags of $7 avocados) to the most potent online shopping infrastructure ever created will almost immediately kill almost every other online grocery delivery service once Amazon figures out how to wield the power of Whole Foods.
Amazon has dipped its toe in grocery delivery, and while the whole thing made a splash, Bezos and his team never quite got anyone to believe that Amazon was really any good at fresh food delivery. But it also stands to reason that Amazon was just experimenting, meaning that not only will it improve over time, but that it has 13.7 billion new reasons to perfect that shit. It also has the distinct advantage of being able to burn money while it figures out this new business line, delivering $7 avocados to its more than 80 million Amazon Prime subscribers, taking some losses while competitors who don't also sell clothes, books, home goods or electronics get priced out of existence.
And there's also this; unlike most companies that announce that they're about to blow billions on a shock acquisition (whaddup Verizon?) Amazon's stock price is soaring in the wake of this announcement:
If Wall Street stays as pleased with this purchase as it is now, Amazon could make back a lot (if not all) of what it paid pretty quickly, re-filling the war chest to keep waging a neverending battle against its rivals.
Speaking of rivals, what's Wal-Mart up to this morning?
Wal-Mart Stores Inc said on Friday it would buy online men's fashion retailer Bonobos Inc for $310 million, in its fourth e-commerce deal in under a year, as it seeks to bridge the gap with e-commerce leader Amazon.com Inc.
C'mon you guys, Amazon isn't going to enjoy this if you just lie there.