Amazon.Com, Inc. Buys Whole Foods Market

Abstract

After Amazon.com announced it would acquire Whole Foods, shares of supermarkets in the United States were hit hard; the same was true for grocers in Europe, as investors there worried about the possibility of Amazon moving beyond US borders in the grocery space. Because little had been said regarding the motivation behind the acquisition, the CEO of a large organic-foods supermarket group in Europe decided that the potential impact of this acquisition might warrant some reflection. He wanted to start by looking at the implications of the acquisition on Amazon's consolidated financial statements.
Excerpt

UVA-C-2409

Rev. Jan. 14, 2021

Amazon.com, Inc. Buys Whole Foods Market

Gabriel Bertrand, CEO of a large organic-foods supermarket group in Europe, pondered the potential implications of Amazon.com's (Amazon) acquisition of Whole Foods Market (Whole Foods) for grocers around the world. After Amazon announced it would acquire Whole Foods, shares of supermarkets in the United States were hit hard; the same was true for grocers in Europe, as investors there worried about the possibility of Amazon moving beyond US borders in the grocery space. In the company's official press release announcing the acquisition, Amazon's CEO Jeff Bezos commented, Millions of people love Whole Foods because they offer the best natural and organic foods, and they make it fun to eat healthy. Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decadesthey're doing an amazing job, and we want that to continue. But beyond that, he had said little regarding the motivation behind the acquisition. Bertrand decided that the potential impact of this acquisition might warrant some reflection. He wanted to start by looking at the implications of the acquisition on Amazon's consolidated financial statements.

Company Description

Founded by Bezos in 1994, Amazon was an Ecommerce and cloud-computing company headquartered in Seattle. It purchased consumer products that it resold to consumers online; had an online platform for third-party sellers to sell their merchandise; sold digital content subscriptions and electronic devices; offered cloud infrastructure through its Amazon Web Services (AWS) segment; and had an annual membership program (Amazon Prime) that included free shipping and access to unlimited streaming of movies and television programs.


. . .

Keywords: [coretail financial and operational data, preacquisition balance sheets, revenue growth, purchase price allocationsales, financial and operational data, preacquisition balance sheets, revenue growth, purchase price allocationmma separated]