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Amazon To Buy Whole Foods In $13.7 Billion Deal

Spencer Selvidge for KUT

Austin-based grocer Whole Foods is in talks to be acquired by ecommerce giant Amazon for $13.7 billion. According to a statement from Whole Foods, Amazon would acquire the organic grocer in an all-cash deal that would pay $42 per share.

Whole Foods’ headquarters will remain in Austin, the company said, and longtime CEO and co-founder John Mackey will continue running the company.

The Austin Chamber of Commerce said Amazon's decision to buy Whole Foods reinforces the city as a great place to start and grow a company. Spokesperson Mike Berman said Amazon's deep pockets might create more opportunities to invest throughout the region. But, he said, there is a downside from an economic development standpoint.

"You have one less authentic Austin headquarter company here. Decisions are potentially made in a different part of the world," Berman said. "I think the key to watch is – will the people and the culture that has been allowed to grow and be successful, will that continue after the deal is done?”

Mickey Chadha, an analyst with Moody’s Investor Service, says Amazon has been trying to break into the grocery delivery business and that buying Whole Foods gives it access to a high-income group of customers.

“It gives Amazon 455 mini-distribution centers or warehouses, if you may, to distribute and deliver those food products that it’s been wanting to do for a while,” he said.  

Chadha said the move is unlikely to result in widespread layoffs because there does not seem to be a lot of overlapping functions between the two companies.

"But there will probably be some combination of workers that are right now performing duplicate tasks in terms of the back office or in terms of the corporate headquarters,” he said.  

Mackey co-founded what would become Whole Foods Market in 1980 with a store at 10th and Lamar. It has grown to more than 400 locations with 87,000 employees in the U.S., Canada and the UK.

Amazon already has a fulfillment center in San Marcos that employs about 3,000 people.

The merger will need approval from shareholders and regulators, but the two companies hope to finalize the deal sometime before the end of the year. 

Andrew Weber is a general assignment reporter for KUT, focusing on criminal justice, policing, courts and homelessness in Austin and Travis County. Got a tip? You can email him at Follow him on Twitter @England_Weber.