Whole Foods: Deal with Amazon will ‘change the world’
Amazon plans to finalize its $13.7 billion purchase of Whole Foods by the end of the year, and John Mackey has expressed the highest of hopes for the merger.
“This partnership’s gonna change the world,” the Whole Foods CEO told employees June 16, according to a Securities and Exchange Commission filing.
“We will be joining a company that’s visionary,” Mackey said in a town hall meeting, the transcript of which was provided in the filing. “I think we’re gonna get a lot of those innovations in our stores. I think we’re gonna see a lot of technology. I think you’re gonna see Whole Foods Market evolve in leaps and bounds.”
Mackey, who will remain CEO after the deal is complete, spoke about what parts of the Whole Foods business will remain and which are expected to change. A constant will be the company’s quality standards, although Mackey left the door open for Amazon to explore grocery opportunities outside the high-end space.
“Over time, there could be other formats that evolve that ... wouldn’t be branded Whole Foods Market, potentially, wouldn’t be our standards,” Mackey said. “But the Whole Foods Market stores and our brands, they’re gonna stay all the quality standards we have.”
As far as changes, analysts predict the acquisition will fast-track some of the initiatives Whole Foods had already begun, including customer data collection and analysis. Mackey expressed a similar expectation.
“(Amazon is) at the forefront of technology ... we’re a little behind there,” Mackey said, jokingly calling Whole Foods the “class dunce” in that area. “I think that we can expect that we’ll go to the front of the class, eventually, in the grocery business.”
In the meeting, Mackey pinpointed the starting point of the acquisition to a visit to Seattle about six weeks earlier. He described the meeting as a blind date set up by mutual friends.
“It was truly love at first sight,” Mackey said, to laughter from his audience, according to the transcript. “We talked for 2 1/2 hours. I think we coulda talked for 10 hours ... We just had these big grins on our faces, like, ‘These guys are amazing.’”
The pending union between Amazon and Whole Foods comes after months of public pressure by investors — including from Jana Partners, with an 8.8% stake in Whole Foods, and from Neuberger Berman, with a 2.7% stake — on the company to explore selling.
The acquisition is the second-largest U.S. grocery deal on record, according to Elizabeth Lim, senior analyst for Mergermarket. It is the biggest since 2006, when Supervalu and investors bought Albertsons for $17.4 billion.
