FTC Approves Amazon's Purchase of Whole Foods

FTC Approves Amazon’s Purchase of Whole Foods

FTC Approves Amazon's Purchase of Whole Foods

Amazon is on its way to completing a $13.7 billion acquisition of Whole Foods with the recent approval from a U.S. regulator and the grocery chain’s shareholders. The U.S. Federal Trade Commission also stated the need for an investigation was not necessary after reviewing “whether the deal would substantially lessen competition or constituted an unfair method of competition.”

Amazon is aiming to make the merger official by the end of this year; reports claim Whole Food’s shareholders were in favor of the deal as it would benefit their company as well. The online shopping giants have proven their dominance, and the introduction of a major grocery market would give them an outstanding advantage over their competitors. The $700 billion U.S. grocery market would be a focus of attention for Amazon and the margins for profit seem incredibly in their favor. It would also give Amazon more than “465 brick-and-mortar stores where it could showcase products and ready packages for home delivery.”

Amazon’s thoughts of merging troubled current large grocers such as Kroger and Wal-Mart. The race to add online shopping options have been at an all-time high in order to keep up with Amazon, but many experts doubt their ability to match Amazon’s expertise with online shopping. With German grocery stores Aldi and Lidl expanding throughout the United States, grocery markets are forced to lower their prices in order to compete, which doesn’t give them much of a choice to disregard the world of online shopping.

“They’re definitely under pressure,” said eMarketer analyst Patricia Orsini. “Without some sort of e-commerce strategy… you’re going to lose those shoppers to a competitor.” Amazon’s Prime feature is the reason why they excel in the world of online shopping. Baird Equity Research analyst Colin Sebastian states, “Prime members are keen to learn the benefits of a bricks-and-mortar approach to Amazon Grocery… The deal will close after they sort out more ’back office’ issues.”

Amazon’s purchase of Whole Foods allowed for Whole Foods’ shares to raise 0.7% in after-hours trading to $41.96 with Amazon’s track record and Whole Foods’ dominance in grocery markets, the powerful duo will be a force to be reckoned with.

Mohammad Ali Sultani
Mohammad Ali Sultani
Mohammad Sultani is currently an undergraduate at the University of San Diego pursuing a degree in Political Science and English. As an experienced writer for various technology, law, and political news outlets, he has shown great potential in his writings and hopes to continue developing his skills. With the goal of becoming an established lawyer and writer, Mohammad is determined to help those in need on both ends of the spectrum.

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