The supermarket chain will continue to operate stores under the Whole Foods Market brand and John Mackey will remain the company's CEO, the release said. Shares of Whole Foods shot up 29 percent and closed at $42.68 amid the news.
"The conventional grocery store should feel threatened and incapable of responding", Wedbush Securities analyst Michael Pachter said. It announced Friday that it's buying online men's clothing retailer Bonobos for $310 million, following a string of online acquisitions including ModCloth and Moosejaw.
Amazon has moved heavily into the grocery delivery business, offering food through its AmazonFresh service.
At least one local shopper at the Andover Whole Foods store had a much different perspective on the deal.
Whole Foods Market was founded in 1978 and as organic food became all the rage, so did Whole Foods.
Amazon's deal to buy Whole Foods Market injects even greater pressure into the food and grocery sectors at a time when e-commerce is already roiling retailers.
And this headline from Business Insider helps explain it: Amazon is acquiring Whole Foods - and Walmart, Target, and Kroger should be terrified.
Mackey, who has viewed Whole Foods as a "mission-driven" company aimed at improving American food, castigated Jana as an example of craven capitalism looking for a quick profit.
Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts.
Amazon, known for its competitive prices, is trying to attract more low- and middle-income shoppers with its grocery push.
"The quality will give to provide a cheaper price to consumers", said Whole Foods Shopper Hamid Fhehollahi.
Whole Foods, which will keep operating stores under its name, said in an email to customers, that it will maintain the same standards under Amazon, including bans on artificial flavors and colors and antibiotics in hens producing its eggs.
Cooper Smith, head of Amazon research at L2, said it's likely that Instacart will be the loser in Friday's deal. To put the Whole Foods purchase price into some kind of context: Sainsbury's is now valued at £5.5bn and has over 1400 United Kingdom stores.
When Amazon approached, Whole Foods turned again to Evercore.
The acquisition stands as a huge boost for Amazon's strategy to integrate the brick-and-mortar model into its business.
The online giant a year ago declared its plans to open a physical grocery store called Amazon Go, a market without cashiers where consumers would be automatically charged based on the items they placed into their shopping bags. Amazon also just launched two grocery pickups kiosks in Seattle that allow its Amazon Prime customers to buy online and pick things up in as little as 15 minutes instead of having them delivered. The deal still has to get approved by shareholders and regulators. For example, Walmart has a "Scan and Go" pilot at one store where consumers can use an app to scan items as they shop and then pay using their phones, according to the JLL report.