Amazon.com is wasting no time integrating with Whole Foods Market, a day after receiving antitrust approval of the acquisition deal.
Amazon.com is wasting no time integrating with Whole Foods Market, announcing a raft of changes to the high-end grocer that the company plans to roll out when the $13.7 billion acquisition closes.
The deal will be sealed Monday, Amazon said in a statement Thursday, a day after U.S. antitrust regulators gave the green light for the deal to proceed.
The Seattle giant said it will immediately lower prices on some Whole Foods items — including bananas, eggs, kale, beef, chicken, salmon and avocados — although it didn’t specify the size of the price cuts.
Many observers had expected that move. The online retailer had made its name offering an abundance of products, often at low prices, and was buying a specialist grocer given the nickname “Whole Paycheck” because of its high prices.
Amazon’s statement detailed a range of other plans for Whole Foods, setting the stage for a rapid integration of the grocer’s more than 460 stores and 87,000 employees just two months after the tie-up was announced.
“They were prepared for this,” said Ben Gomes-Casseres, a professor at the Brandeis International Business School who tracks corporate mergers. “It certainly is quick.”
Amazon said it will link Whole Foods with Amazon Prime, offering grocery discounts and other goodies to people enrolled in the membership program. Amazon Prime will also replace Whole Foods’ existing loyalty program.
Whole Foods’ house brands, including 365 Everyday Value, will be sold on Amazon.com, including through delivery services like AmazonFresh and PrimePantry.
The plans also show Amazon’s ambitions to use Whole Foods’ brick-and-mortar footprint to get closer to consumers. The company said it will place lockers — delivery points for online Amazon orders — in select Whole Foods stores, and try other in-store pickup and return options.
More integration will follow, the company said, as it uses its new stores and their supply chains as retail laboratories.
Gomes-Casseres said an obvious step down the road would be adding Whole Foods groceries to the Alexa digital assistant’s order-by-voice capabilities.
Whole Foods will continue to operate its own brand, and it will keep its Austin, Texas, headquarters and chief executive, John Mackey.
Whole Foods will operate under Amazon’s worldwide consumer unit, led by Jeff Wilke.
For Whole Foods employees, the merger agreement includes guarantees that their salary, benefits, bonuses and severance options will not be reduced during the first year under Amazon.
Top executives get a better deal. Their salaries and benefits are guaranteed for two years, a perk that comes in addition to the “golden parachute” sums, payable in the event of their termination. Those range from $2.9 million for U.S. operations chief David Lannon to $6.2 million in the case of chief information officer Jason Buechel.
Amazon had cleared its two biggest potential obstacles to the deal Wednesday. First, Whole Foods shareholders, meeting at the Austin headquarters, voted to approve the acquisition. Later, the Federal Trade Commission said it would not pursue a deeper investigation of the deal’s potential effects on competition.
Grocery stocks fell Thursday on speculation that Amazon’s price-cut moves at Whole Foods would heat up a price war among U.S. grocers.
Kroger shares sank 8.1 percent, Costco fell 5 percent and Wal-Mart, which sells the most groceries in the United States, ended the trading day down 2 percent.
Amazon’s stock also slipped 0.6 percent Thursday as the broader market fell slightly.