Amazon Buys Whole Foods for $13.7 Billion: Does This Mean the ‘Greedy Bastards’ Won?
Two giant brands, two larger-than-life CEOs, and a heck of a story to watch.
PHOTO CREDIT: Getty Images
This is going to be a fascinating acquisition and integration to watch. Call it Conscious Capitalism meets The Everything Store. (That's Whole Foods CEO John Mackey's book, along with Brad Stone's bestseller about Amazon, in case you're trying to place the titles.)
Can you imagine Jeff Bezos getting a complaint about Whole Foods and forwarding it to Mackey with a question mark?
Terms of the deal first: They're pretty pretty tasty if you own Whole Foods stock--$42 per share in an all-cash transaction that includes taking over all of the organic grocery chain's debt. That values the company at $13.7 billion.
On the public market, Whole Foods shares had been hovering in the low- to mid-$30 range, and were at $33.06 before the deal was announced, so it's a nice premium--27 percent. (You can check Whole Foods stock history here. Amazon's stock ticker is here.)
A lot of Whole Foods investors are going to make a lot of money, and that's a story in and of itself. But the deal also means a potential--heck, likely--leadership clash.
It was only two days ago that Mackey, who co-founded the company nearly 40 years ago in Austin, Texas, laid into activist investors that had grabbed a big chunk of his company's stock, because they were pushing for a quick sale.
Investment manger Jana Partners, which holds almost 9 percent of Whole Foods, was a bunch of "greedy bastards," Mackey said in an interview with Texas Monthly.
"[T]hese guys just want to sell us, because they think they can make 40 or 50 percent in a short period of time. They're greedy bastards, and they're putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it's in their self-interest to do so," Mackey said.
If you're doing the quick math, the Jana Partners stake would be worth north of $1 billion. So I guess the greedy bastards finish first.
Bezos and Mackey together?
There's no word on what role Mackey would retain under the Amazon acquisition. How well could the super-outspoken and controversial Mackey, who has led his company since Jeff Bezos was 14 years old, be expected to settle in as the company he founded becomes an Amazon subsidiary?
Or even--it could happen--as Whole Foods ultimately winds up rolled into Amazon Fresh? Last year there was news that Amazon was looking to get into the brick and mortar grocery store business--although developing reports were a bit conflicted as to the scale of the project.
Both Bezos and Mackey are famously long-term thinkers, but it's fun (to put it lightly) them working together--or especially Mackey subsuming his vision to Bezos's. Here are Bezos's and Mackey's official statements on the deal, culled from a press release announcing it:
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy. 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."
"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."
Hmmm. Nothing in either statement about either CEO being excited to work with the other.
Personally, I'm now hoping Amazon goes forward with the rumored purchase of Slack--if only because I'd like to someday see the transcripts of messages between these two titans.