Shareowners, FTC OK Amazon, Whole Foods Deal

Walmart to team with Google in response.

Whole Foods shareowners and federal regulators alike proved analysts right, voting “yay” on the $13.7 billion acquisition from online retail goliath Amazon on Wednesday. The deal is expected to close by the end of the year.

Shareholders voted for the merger in the earlier portion of the day, and the Federal Trade Commission —which regulates consumer protection as well as investigates anti-competitive marketplace practices— approved of the deal later in the day.

“The FTC conducted an investigation of this proposed acquisition to determine whether it substantially lessened competition under Section 7 of the Clayton Act, or constituted an unfair method of competition under Section 5 of the FTC Act,” acting director Hoffman said in a statement. “Based on our investigation we have decided not to pursue this matter further. Of course, the FTC always has the ability to investigate anticompetitive conduct should such action be warranted.”
At the time of the announcement in June, the deal rattled the market as grocery stocks shifted, boosting Amazon and Whole Foods stocks 2.44% and 29.10%, respectively.

The arrangement will cement Amazon more firmly in the physical retail world—most notably the grocery sector—in which it has been experimenting via AmazonFresh, Amazon Books, and the checkout-free Amazon Go stores. 

However, the competition is less than friendly, as Google and Walmart—the world’s largest company by revenue—announced a partnership Wednesday. Starting next month, Google will start selling Walmart products on Google Express. Google will also remove its $95 annual membership fee and will offer free delivery on orders above a minimum. Walmart will also implement Google’s voice-shopping technology into its 4,700 US stores.

Amazon says it does not plan to lay off any Whole Foods employees or implement any Amazon Go technology into stores—which will continue to operate under the Whole Foods name.

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