Champagne may have be flowing in Austin, Texas, and Seattle, after shareholders of Whole Foods Markets Inc. (WFM) approved Amazon.com Inc.'s (AMZN - Get Report) bid to buy the upscale grocer for $13.7 billion on Wednesday, Aug. 23.
But guess what? It still has to be approved by federal regulators first, and there's opposition. Some comes from President Donald Trump, who has no say, but has taken Twitter aim at Amazon, whose CEO Jeff Bezos also owns the Washington Post. The Post covers the president vigorously.
So, Whole Fooders in Texas, and Amazonians in Seattle, enjoy the bubbly if you like, but don't uncork all the magnums. Save some till the deal is in fact a reality.
That okay from all parties will give the dominant e-tailer a strong foothold in the bricks-and-mortar grocery space, which is enormous. As of 2015, U.S. grocery store sales amounted to about $602.3 billion, according to Statista.
Co-founder John Mackey could rake in nearly $9 million if the sale goes through, reported TheStreet's Laura Berman on Wednesday.
Amazon has been trying to crack the grocery business, as it has cracked other sectors, with its Amazon Fresh, which hasn't taken off. The Whole Foods deal would give them 470 stores, the bulk in the U.S., with locations in Canada and the U.K. and the cachet of the Whole Foods brand, which stands for quality.
Wedbush Securities analyst Michael Pachter told TheStreet on Tuesday, Aug. 22, that there's no real mystery to this deal, even though theories about it were ripe for wild speculation. The simple answer is refrigerated distribution, said Pachter, and proximity to customers who are concerned about freshness.
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