AMAZON AND WHOLE FOODS MERGER: AN ANALYSIS OF ACCRETIVE EARNINGS

Open Access
Author:
Weiland, Emily R
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Brian Spangler Davis, Thesis Supervisor
  • Brian Spangler Davis, Honors Advisor
  • Brent William Ambrose, Faculty Reader
Keywords:
  • Amazon
  • Whole Foods
  • accretive to earnings
Abstract:
Amazon is a well-known and respected U.S. company that fascinates and intimidates both companies and consumers alike, not only in the United States, but also in countries throughout the world. The company was responsible for 43 percent of all online sales in the U.S. in 2016 and sparked curiosity in many last summer after announcing their plans to acquire U.S. grocer Whole Foods for $13.7 billion. Given that Amazon was the only company that offered to buy Whole Foods, it suggests that they paid a premium to acquire Whole Foods’ distribution system and networks. Ultimately this deal will pay off for Amazon as long as the deal is accretive to their future earnings. In order to do so, Amazon must figure out how to successfully integrate both wealthy customer bases and utilize their new assets in order to continue to pursue the aggressive growth strategy they have been pursuing for the last two decades.