Walmart isn’t actively considering a bid for Whole Foods, which Amazon said it would purchase for $13.7 billion last week, according to a report by Reuters.
If so, that would remove a major obstacle to Amazon’s bid to acquire the grocery chain. Whole Foods has hundreds of stores across the U.S., which could give Amazon a foothold in the grocery business — and possibly food delivery. But it’s possible that other companies could swoop in and try to make a bigger bid for Whole Foods, turning the deal into a competitive one despite Amazon’s current offer.
[relarted_articles]Major acquisitions like these can sometimes spark a bidding war. It may be a defensive maneuver to head off the looming threat of Amazon suddenly having grocery nodes in cities across the U.S. Alternatively, it may just turn into a bidding war to force companies into paying as much as possible, decreasing their operational leverage as they have to pour out a large amount of money for the acquisition.
Amazon’s deal with Whole Foods puts it in a highly competitive position against brick and mortar chains by giving it a physical presence outside of its delivery warehouses. Amazon has been trying to get into the grocery and food market for some time, particularly with Amazon Fresh. It’s also part of a continued sort of fusion between food and tech as many startups go after food and meal delivery. Instacart in particular potentially faces major challenges after the acquisition.
We’ve reached out to Amazon and Walmart and will update the story when we hear back.
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