Amazon to Buy Whole Foods for $13.7 Billion -- 2nd Update

By Austen Hufford Features Dow Jones Newswires

Amazon.com Inc. said it would buy Whole Foods Market for $13.7 billion as the giant internet retailer makes a deeper push into the grocery space.

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Amazon will pay $42 a share for Whole Foods, valuing the grocer at a 27% premium to its closing price Thursday. The deal is expected to close in the second half of this year.

In recent years, the once online-only bookseller that has expanded to dominate much of the retail space has made inroads into the physical retail market, including opening a small number of Amazon book stores.

In recent years, Amazon has expanded its online grocery business, AmazonFresh, after testing it in its hometown Seattle for years. While grocery accounts for a large component of consumer sales overall, online retailers have largely been unable to fully crack the code. They face hurdles like consumers wanting to pick their own produce and the need to deliver fresh and frozen food to people's homes.

Shares of Amazon were up 0.9% in premarket trading as Whole Foods shares were temporarily halted on the news.

John Mackey will remain as chief executive of Whole Foods and the store will continue to operate under its brand and maintain its suppliers.

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Whole Foods' stock has lost nearly half of its value since peaking in 2013, as its same-store-sales have persistently fallen since September 2015.

Shares of Amazon were up 0.9% in premarket trading as Whole Foods shares were temporarily halted on the news.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

June 16, 2017 09:34 ET (13:34 GMT)