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Amazon-Whole Foods Deal Prevented Grocer From Accepting Counterbids, Regulatory Filing Reveals

After news of Amazon’s $13.7B Whole Foods Market deal broke, analysts speculated about a potential bidding war spurred by competing grocers to strategically prevent or derail the deal.

But terms of the deal prevented the high-end grocer from seeking or accepting any other bids, a regulatory filing disclosed last week. 

Amazon whole foods merger

Amazon told the grocer it would not go through with the buyout should Whole Foods consider any other bidders, Reuters reports

As investors anxiously awaited confirmation of a counterbid, Whole Foods’ stock, which was trading at $42/share when the deal was announced June 16, jumped briefly for a few days before falling back below the sale price.

The filing revealed that Whole Foods opted not to proceed with an auction process, even after receiving interest from two competing grocers and four private equity funds, one of which was Albertsons, a high-end grocery chain owned by Cerberus Capital Management, sources told Reuters.

Amazon initially bid $41/share in May, but Whole Foods countered asking for $45/share. The two settled on $42/share, which Amazon said was its “best and final offer,” the filing reads. Amazon told Whole Foods it was looking into other buyout opportunities should its final offer be rejected.

The e-commerce behemoth has been working to expand its physical brick-and-mortar presence for some time now, and this deal will not only give Amazon access to Whole Food’s portfolio of 450-plus stores, but also gives Amazon control of the grocer’s distribution network — complete with store backrooms and cold storage.