World Bulletin / News Desk
Amazon is once again shaking up the retail sector, with the announcement Friday it will acquire upscale US grocer Whole Foods Market, in a deal that underscores the online giant's growing influence in the economy.
In the $13.7 billion, all-cash deal, Amazon will buy the Texas-based champion of organic and specialty food for $42 a share. Whole Foods' shares traded in the mid-$30 range for May and early June.
The announcement had immediate and punishing consequences on Wall Street for retailers, such as Wal-Mart Stores, that sell groceries and are expected to face even tougher competition with Amazon now much more active in the space.
But shares of Whole Foods shot up 29.1 percent to close at $42.68, while Amazon jumped 2.4 percent to $987.71, a gain of $11.3 billion in market capitalization, close to the value of the deal itself.
However, S&P placed Amazon on credit watch with negative implications on expectations the company will increase debt to finance the takeover.
Whole Foods will continue to operate stores under its brand and will continue to be led by co-founder and chief executive John Mackey, the companies said.
Mackey helped grow the company from a tiny health-conscious grocer in Texas into a giant in upscale chain in all but eight US states.
"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," Mackey said.
Investors will also be tracking the start of an EU summit where Brexit will once again be the focus of attention.
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