Amazon pays $13.7 billion for Whole Foods Market

Amazon will pay $13.7 billion in cash for Whole Foods Market Inc. the largest deal in the Amazon’s history

Amazon's (AMZN) announcement to buy organic grocer Whole Foods (WFM) invigorated the company's stock prices on Friday, but with the tie up expected to close in the last half of the year, there's still room for another bidder to throw a wrench in the e-commerce giant's plans to storm into the food-retail space. It will continue under co-founder and CEO John Mackey with its headquarters in Austin, Texas.

"As Amazon has more resources, they might be able to streamline some efficiencies for Whole Foods, allowing the retailer to offer its organic and more sustainable products at more affordable prices", said Lauren Beitelspacher, a marketing professor at Babson College in xxxxx.

Amazon said on Friday that it would buy Whole Foods for $13.7 billion.

Still, mergers of this size rarely instill confidence within the same sphere of stockholders.

Major U.S. indexes are slightly lower in midday trading on Wall Street, but grocery stores and other retailers are plunging after Amazon said it would buy Whole Foods.

For Amazon, the deal marks an ambitious push into the $670 billion grocery business. From amusing observations to skeptical outlooks, here's what Twitter users have to say on the matter. The S&P 500 food and staples retailing index dropped 4.2 percent.

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For Whole Foods, the deal represents a chance to fend off pressure from activists investors frustrated by a sluggish stock price. Amazon might be able to sell affordable groceries as it makes its money from its online marketplace, and do to big grocery stores what it's done to many other retailers.

"We've always thought the brand was worth more than the company - I'm guessing this isn't the final chapter", said Charles Kantor, managing director at Neuberger Berman Group, a top 10 holder of Whole Foods stock. The brand has over 450 brick-and-mortar locations, and The Washington Post stated that it had trouble attracting mainstream consumers, who were drawn to other more affordable outlets such as Wal-Mart that had begun to offer natural and organic products. Whole Foods will keep operating stores under its name.

For Amazon, the deal also represents an opportunity to extend its business from online retail to physical stores.

Other retailers should take note: Don't be afraid of e-commerce. Will online retailers such as Amazon change the way people shop, permanently?

Whole Foods has received a lot of pressure from key investors, resulting in a shake-up in management.

But Amazon's not going away and that will incite change, he said. Whole Foods jumped $9.44, or 28.6 percent, to $42.50 while Amazon climbed $27.95, or 2.9 percent, to $992.12.

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