Whole Foods Shareholders Approve Merger With Amazon
August 23 2017 - 11:00AM
Dow Jones News
By Heather Haddon
Shareholders of Whole Foods Market Inc. approved the natural
grocer's takeover by Amazon.com Inc., a key step for the e-commerce
giant to seal its biggest play yet in the more-than $700 billion
food retail market.
The $13.7 billion deal, including debt, was approved by Whole
Foods shareholders on Wednesday, the Austin-based company said.
Amazon shareholders don't need to sign off on the transaction.
Amazon and Whole Foods both want to close the deal by the end of
the year. Federal regulators are still evaluating it. Whole Foods
had seen its stock lose more than half of its value as its sales
have slumped in the past two years, as mainstream supermarkets have
started to sell similar natural and organic goods offerings at
lower prices.
The slump prompted activist investors this year to push for
board and operational changes at Whole Foods. That pressure drove
Whole Food executives to agree to a deal with Amazon, which is
seeking to expand its reach into food retail.
The deal is the biggest U.S. retail merger so far this year, and
would be the third largest since 1995, according to Dealogic.
Shareholder proxy services Institutional Shareholder Services
Inc. and Glass, Lewis & Co. endorsed the merger despite some
concerns over a lack of a full sales process. Glass Lewis said
increasing competition in the grocery sector and questions
surrounding Whole Foods's ability to improve its operations makes
the deal beneficial to investors.
Shareholders also approved proposals to decrease the number of
publicly traded Whole Foods shares by half, and to allow payouts to
company executives under the deal.
ISS expressed reservations about the cash and stock payouts,
which amount to $20 million to six officers if they are replaced.
But the proxy service recommended shareholders vote for it given
the payouts represent a fraction of the stock value gains under a
merger.
Laura Stevens contributed to this article.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
August 23, 2017 10:45 ET (14:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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