Amazon Acquires Whole Foods !

This will be an all cash deal valued at just under $14 Billion Dollars.

Amazon Announce dealt o Acquire Whole Foods Market (WFM) for Just shy of $14 Billion dollars.

Whole Foods started in 1980 in Austin, Texas. Today it has grown to 465 stores and has a current Market Cap of  $10.5 Billion. Whole foods has a reputation as a supplier to a large group growing health conscious consumers that demand healthy, organic , wholesome food products.

Amazon & Whole Foods Press Release :

Whole Foods Market ranked #28 and Amazon ranked #2 on Fortune’s 2017 list of World’s Most Admired Companies

SEATTLE and AUSTIN, Texas, June 16, 2017 (GLOBE NEWSWIRE) — Amazon (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO. “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,” said John Mackey, Whole Foods Market co-founder and CEO.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.

Completion of the transaction is subject to approval by Whole Foods Market’s shareholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2017.

Read Press Release in its entirety : Amazon-to-Acquire-Whole-Foods-Market

This will be an all cash deal valued at just under $14 Billion Dollars. it will be interesting to watch how Amazon folds this store into its expanding “Prime Pantry”.

 

 

 

Advertisements

FANG Stocks

“The Fang stocks are up about 30% so far in 2017. “

What are the “Fang Stocks”

The slang term “Fang Stocks” is an acronym for the high flying tech stocks Facebook (FB), Amazon (AMZN) , Netflix (NFLX), and Google (Alphabet) (GOOG) (GOOGL) .

 

Some are including FAANG Stocks by the addition of Apple (AAPL) into the fray.

The Fang stocks are up about 30% so far in 2017.

 

BJ’s Wholesale is Putting Itself Up for Sale

BJ’s Wholesale club has decided to put itself up for sale backing out of a potential IPO due to the present climate regarding retail in general. According to the New York Post Amazon (AMZN) has expressed possible interest.

The sale, if it occurs would be expected to bring in the neighborhood of 4 Billion Dollars.

Amazon Seeks to Destroy Brick and Mortar Retail Stores

Maybe not trying to destroy Brick and Mortar but it certainly seems to be steam rolling everyone that gets in its way!

Last week it was reported that Amazon may be looking to expand its own Brick and Mortar presence by rolling out its own grocery stores and retail stores that would serve as virtual showrooms for some key products that consumers might want to see and touch before making a decision to buy. Now  we are hearing rumors that Amazon is meeting with key executives from large product companies and are in negotiations to cut out the “middlemen” in the supply chains in order to deliver products to  the consumers through Amazon.

some of the companies invited to the Seattle meeting reads like a whose who list of name brand products like Nike (NKE), Unilever (UN) , Proctor and Gamble (PG) , General Mills (GIS), Mondelez (MDLZ), Kimberly-Clark (KMB) and others.

If successful this could very well spell the end of retail, at least as we know it  now.  There is no doubt that traditional retail is going through some serious transitions and changes but no one seems to know exactly how this will play out. Amazon has the power and clout to push it into different directions and right now they are the king of the hill.

Because of all this uncertainty about the future direction of retail and exactly who might be the winners and losers I recommend to steer clear of traditional retail stocks. The better play in my opinion are the suppliers and wholesale manufacturers which may be able to increase profits by the changes. Of course there could also be winners and losers in the suppliers imagine if Proctor & Gamble jumped on board with Amazon but Unilever failed to do so. That could leave the hesitant company locked out of a huge market place and be very detrimental to their bottom line. Also coming into play is Walmart. Walmart is reportedly putting pressure on suppliers to reduce their prices for Walmart by reducing the companies marketing initiatives just so Walmart can have the lowest prices and is threatening them with replacing their products with generic versions if they do not comply. If this is true then this might give companies even more incentive to team up with Amazon.

In addition to the big named retailers lots of smaller mom and pop shops could also be pushed aside as the distributors are forced out of play.

This will more than likely take months if not years to play out but will be interesting to watch and will keep every one, including investors on their toes during the process. As for me I am going to stay out of retail stocks altogether. I prefer to have a clear direction and understanding of a segment before investing in it. We could see a lot of pain and suffering in the retail sector for years and right now I don’t feel safe in it. That could very well change as soon as the big picture becomes clear but for now, my money will be going elsewhere

Your thoughts or comments are always welcome !