In almost all respects, this is the only viable “going out” Whole Foods Company (WFM), and the ambitions of the next natural progression Amazon.com company (AMZN) and groceries. Ergonomics, which is the owner of AMZN stock, seeking to understand the acquisition of e-commerce giant struggle on Friday morning the entire food market is no real surprise, to provide you with a 42% share of the $ WFM stock obtained to complete the transaction.

This is the Department of the Ministry of Justice is unlikely to be any antitrust issues, it is equally impossible to Whole Foods shareholders’ expense – they will be very happy to be a serious situation that

All of the happiest, however, should be the Amazon stockholders, such as the acquisition could give Amazon in the food industry, it has been eyeing for some high-quality footing.

Amazon collection of whole food

The deal values ​​Whole Foods at $ 13.7 billion, up by Amazon announced this morning. Explanation from Amazon CEO Jeff Bezos in a statement:

“Mmillions of people like Whole Foods, because they provide the best natural and organic foods, they make it fun to eat healthy . whole foods has been met, please and tonic customers for nearly four decades – they’re doing a great job, and we want that to continue. ”

It is difficult company’s first foray into food retailing. The company’s grocery delivery business called AmazonFresh begin beta testing in Seattle a decade ago, and over the past few years a handful of courses have been introduced in major markets. Late last year began testing a small convenience mart cashier thought this year, it launched a couple of drive-thru language environment, customers can bring their car after they order their groceries online.

Buy Whole Foods market, however, this is the first time Amazon will get the opportunity to go head to head with the true companies like Kroger (KR) and Wal-Mart (WMT) opponent.

Worth consolidation and overhaul Whole Foods market is not easy.

Twenty years ago, Whole Foods supermarket, because there was only a handful of stores addressing a niche market, while the more traditional grocery stores do not even have to enter the interest in organic foods and healthyFood business. As is often the case, however, the competition LIKË Kroger crept into space, too aggressive store expansion has left it more than it can really afford to operate part of the whole food.

There is not so small things earned the nickname of “full Paycheck,” with many potential buyers find it increasingly can not afford the fare.

However, Whole Foods Market is saved. This is mainly why the activist investor Jana Partners Group took a controlling stake last month. Better technology, restructuring and other fixes Board is a program that allows each part of the company’s bid was going to propose. Which clearly appear, even before Jana expectations. In either case, there is little doubt that there is a lot to do to get Jana to complete the transaction.

Whole Foods Market integration would be worth the life ah. US consumers spend about one billion every $ 600 in groceries, and the figures are larger each year

This is not a horrible profitable business is in. Kroger’s net profit margin is about 2%. Amazon is no stranger, though meager profits and Amazon customers can make money the way traditional retailers can not emotion.

Looking to the future of AMZN stock

Do not look at acquisitions or exceed current time Whole Foods market footprint expansion to enhance the value of AMZN stock. Amazon itself is still figuring out how to “do” groceries, and it would like to be rebuilt from scratch Whole Foods …… at least to some extent Jana partner yet. It takes time. However, this is a bullish FEA therapy ceiling in the Amazon.

Because it is possible, although it may not have a lot of the grocery business profits, data one ton squeeze in people’s shopping habits, consumption and lifestyle.

Iif you buy in early February snacks, you might be a football fan to try Super Bowl party. If you buy deli meat, you may also need bread and mustard. If you have bought cereal child per week, you may (though not necessarily) have children.

This type of data will make the Amazon more effective marketing, service as an entry point into these other aspects of the consumer’s life.

If nothing else, the entire food market stores to AmazonFSome have resh ES Go, go online order pickup location. In other words, this really is the backbone of Amazon’s growth, not only in the grocery store sales of high-heeled shoes. This may take a few quarters to get there, though.

InvestorPlace article from James Brumley. As of this writing, he held no such securities.

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