Amazon shook up the stock market on Friday when they announced their plans to purchase the grocery chain Whole Foods in a $13.7 billion deal.
That equals $42 a share, which is 27 percent higher than the closing price of Whole Foods shares on Thursday. After the deal was announced, however, Whole Foods shares jumped 28 percent. Amazon’s own shares increased 3.4 percent.
Many grocery chains, as well as Amazon’s competitors, were hit hard by the deal. Costco’s stocks fell seven percent, Kroger’s stocks dropped 14.5 percent, and Supervalu’s stocks sank 17 percent. Walmart’s stocks fell around seven percent, while Target’s stocks were down by 10 percent.
Jack Mackey will stay on as CEO of Whole Foods, and it will continue operating under its own name and brand. The deal is awaiting shareholder and regulatory approval and is expected to be finalized later this year.
Amazon has recently been experimenting with physical stores. They’ve opened up several bookstores and an Amazon Go grocery store in Seattle. Whole Foods has recently been struggling with pressure from investors and went through a board upheaval last month.
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