You have reached your limit of free articles this month.

Enjoy unlimited access to myStatesman.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks

X

Welcome to myStatesman.com

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on myStatesman.com.

Report: Amazon considered bid to buy Whole Foods


Highlights

Founded in Austin in 1978, Whole Foods has 462 stores worldwide and 87,000 employees.

Aside from Amazon, potential suitors reportedly include mainstream grocers Kroger and Albertsons.

Online retail giant Amazon.com last year considered making a takeover bid for Austin-based Whole Foods Market Inc., but decided not to pursue a deal, Bloomberg news service reported, citing unnamed sources.

Citing a person with knowledge of the situation, Bloomberg reports that Amazon considered whether Whole Foods would help invigorate its push into groceries, but that the discussions never turned into a concrete plan.

Founded in Austin in 1978, Whole Foods is one of Austin’s best-known companies, with 462 stores worldwide and 87,000 employees.

Amazon is already in the grocery business, to a limited extent, with features such as its AmazonFresh service in certain markets. It’s also been experimenting with a convenience store of the future in Seattle, its home base, where there are no cashiers – instead, special technology tallies everything up as you shop.

Acquiring Whole Foods would have given Amazon a new foothold into the lucrative, but highly competitive, grocery game, providing it with brick-and-mortar stores and distribution centers, plus improved access to key vendors.

It would have come at a steep cost, though. Whole Foods is valued at almost $11 billion – 10 times Amazon’s biggest purchase to date, online shoe retailer Zappos. Zappos sold for $1.2 billion in 2009.

The Bloomberg report comes on the heels of Jana Partners LLC, now one of the biggest investors in Whole Foods Market, saying publicly that it wants the company to consider a variety of potential changes — including a possible sale.

Aside from Amazon, Jana’s list of potential suitors includes mainstream grocers Kroger and Albertsons, according to published reports.

Spokespeople for Amazon, Kroger and Albertsons declined comment on a possible acquisition.

Publix, a Florida-based chain, is another name that has been mentioned in the past as a possible Whole Foods suitor.

A number of factors, including intensified competition, have hit the Austin-based Whole Foods hard, leading to struggles in recent quarters. A March report from a Barclays analyst, for instance, suggested Whole Foods had lost 14 million customers since 2015 — many of them to Kroger, which has stepped up its organic offerings.

Jana Partners, which owns about 9 percent of Whole Foods stock, said in a securities filing Monday that, essentially, enough is enough. Other smaller investors also signed off on the filing, where Jana Partners, which says it has “substantial experience analyzing and investing in the grocery sector,” describes Whole Foods stock as “undervalued.”

Still, despite its issues, Edward Jones analyst Brian Yarbrough, who follows Whole Foods, told Bloomberg he believes the company could be an attractive acquisition target.

“They’ve struggled, but it’s a strong brand,” he said.



Reader Comments ...


Next Up in Business

Have a great workplace? Let us know
Have a great workplace? Let us know

Help us spread the word about the best places to work in Austin. Nominations are now open for the American-Statesman’s 2017 Top Workplaces of Greater Austin project. The project recognizes employers that stand for the best in leadership, vision, an employee-centered culture and other qualities. Any employer is eligible — private company...
Up the Ladder

Biomedical Aeglea BioTherapeutics has named Anthony Quinn interim chief medical officer. Health care St. David’s HealthCare has named Diana Kraus assistant vice president of trauma. Professional honors Sandra D. Gonzalez of Greenberg Traurig has been elected to the Fellows of the Texas Bar Foundation.
Top Local Business Stories of the Week
Top Local Business Stories of the Week

WHOLE FOODS TAKEOVER? Report says Albertsons considering takeover bid for Whole Foods: Supermarket chain Albertsons is exploring a possible takeover of Austin-based Whole Foods Market, the Financial Times reported last week, citing unnamed sources. Albertsons, which operates about 2,200 stores, is controlled by buyout group Cerberus Capital Management...
House tax plan has surprising implications

Last June, Republicans in the House Ways and Means Committee rolled out their “Better Way” tax reform plan. It proposes big changes to business and personal taxation. Critics say it’s regressive and will likely decrease revenues because of the cut in personal rates. But a closer look suggests neither is true. Moreover, the business...
Business Digest: Germany-based group buys Austin office building

COMMERCIAL REAL ESTATE Germany-based group buys Austin office building The Capital Ridge office building in Southwest Austin has a new owner. GLL Real Estate Partners, a real estate fund management group based in Munich, Germany, recently purchased the building from Capital Ridge-RE LP, according to Travis County deed records. The purchase price was...
More Stories