SEATTLE & AUSTIN, Texas -- The Federal Trade Commission (FTC) gave its stamp of approval to online retailer Amazon's pending acquisition of brick-and-mortar specialty grocer Whole Foods Market, clearing the way for the $13.7 billion deal to close on Aug. 28, the companies said.
Whole Foods shareholders also voted to approve the deal, which does not require Amazon shareholder approval. Once the acquisition closes, Amazon will have an estimated 2% share of the U.S. grocery market, according to Grocery Headquarters magazine.
“The FTC conducted an investigation of this proposed acquisition to determine whether it substantially lessened competition … or constituted an unfair method of competition,” Bruce Hoffman, acting director of the FTC’s Bureau of Competition, said. “Based on our investigation, we have decided not to pursue this matter further. Of course, the FTC always has the ability to investigate anti-competitive conduct should such action be warranted.”
The most immediate effect of the marriage of Amazon and Whole Foods will be lower prices, according to the companies.
“The two companies will together pursue the vision of making Whole Foods Market's high-quality, natural and organic food affordable for everyone,” the companies said. “As a down payment on that vision, Whole Foods Market will offer lower prices starting Monday [Aug. 28] on a selection of best-selling grocery staples across its stores, with more to come.”
In addition, Amazon and Whole Foods technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale (POS) system, and Amazon Prime will become Whole Foods’ customer rewards program.
Also, Whole Foods’ private-label products will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.
Amazon Lockers also will be available in select Whole Foods stores. Customers can have products shipped from Amazon.com to their local Whole Foods Market for pick up or send returns back to Amazon during a trip to the store.
The companies plan to offer more in-store benefits and lower prices for customers over time as the they integrate logistics and POS and merchandising systems, they said.
Whole Foods will maintain operations under the Whole Foods Market brand and will continue to offer natural and organic foods. John Mackey will remain CEO, and Whole Foods’ headquarters will stay in Austin, Texas.
In fiscal year 2016, Whole Foods had sales of approximately $16 billion and has more than 460 stores in the United States, Canada and the United Kingdom. Amazon.com Inc. is based in Seattle.
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