Merger and Acquisition of Amazon and Whole Foods - Impact on Companies and Financial Statements

Merger and Acquisition

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Details of merger and acquisition....................................................................................................3
Impact on companies.......................................................................................................................4
From the perspective of the buyer (Amazon)..............................................................................4
From the perspective of the seller (Whole Foods).......................................................................4
Impacts on financial statements.......................................................................................................5
Conclusion.......................................................................................................................................6
Bibliogrpahy....................................................................................................................................7
Appendices......................................................................................................................................8
Purchase price allocation.............................................................................................................8
Pro forma financial information..................................................................................................9
Goodwill......................................................................................................................................9

INTRODUCTION
The present study is based on the analysis and evaluation of the Merger and Acquisition of
Amazon and Whole Foods. The study will include the proper details of overall merger and
acquisition; along with this, the study will also cover the impact of the same on companies and
financial statements.
DETAILS OF MERGER AND ACQUISITION
During March 20 in the year 2018, Amazon turned out to be the 2nd most valuable company all
over the world, having a market capitalization surpassing $768B. Key investments were made by
the retailing giant of US in the year 2017, inclusive of an offer to purchase the WHM organic
grocery chain on the rate of $42 each share or the total amount of 13B. After the declaration, the
Amazon received approx $19 billion held from market capitalization, and further, the final
decision was made on the acquisition in August 2017.
At the time of the announcement was made and the deal was done at 13B, this surprised the
entire grocery industry, a shock of a deal that projects the e-commerce giant into several physical
stores and satisfies the long-term objective of putting a higher amount of groceries into same1.
In June 2017, Amazon bombshell customers and industry with the acquisition prices at $13.7
billion of the grocery chain2. It evidenced the seriousness of Amazon regarding the operation of
traditional brick-and-mortar stores at a wide scale.
Whole Foods increased by 28% on acquisition deal of the Amazon. It also indicated that
Amazon was directly aiming at the old grocery industry. Further, the deal was finalized in
August, and the stamp was put by Amazon throughout the stores of Whole Foods.
The reason for the acquisition was that the Amazon’s e-commerce group was attempting to
expand its online to compete effectively with the Walmart in the retailing sector3.
1 Andrew Sherman. Mergers and Acquisitions from A to Z. (Amacom, 2018).
2 Kim Eugene. Amazon's soaring goodwill balance shows how Whole Foods buy was a long-term bet. (Tech 2018):
https://www.cnbc.com/2018/02/06/amazon-10-billion-goodwill-balance-shows-whole-foods-strategy.html
3 Kim Eugene. Amazon's soaring goodwill balance shows how Whole Foods buy was a long-term bet. (Tech 2018):
https://www.cnbc.com/2018/02/06/amazon-10-billion-goodwill-balance-shows-whole-foods-strategy.html