June 16 (UPI) -- Amazon on Friday announced it will acquire grocery chain Whole Foods Market Inc. in a $13.7 billion deal.
Amazon's offer of $42 per share represents a 27 percent premium over Whole Foods' closing price on Thursday.
Trading in Whole Foods was halted Thursday prior to the announcement; stock value of grocery competitor Kroger fell 16 percent, Supervalu fell 9.5 percent and Costco fell 6.5 percent.
Whole Foods has more than 400 locations in the United States, Canada and Britain.
The deal between the online retailer and the upscale brick-and-mortar organic grocery chain is not one of obvious partners. Activist investor Jana Partners LLC, which acquired shares of Whole Foods stock, pressed for the sale of the company or a merger with another grocer. Jana's action was a source of irritation to Whole Foods CEO and co-founder John Mackey, who has referred to the grocery chain as his "baby," Bloomberg News reported Friday.
The deal with Amazon will allow Mackey to keep his position. It is expected to close in the second half of 2017. The company's headquarters will remain in Austin, Texas.
"Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy," Jeff Bezos, Amazon founder and CEO, said in a statement. "Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades -- they're doing an amazing job and we want that to continue."
The purchase is Seattle-based Amazon's largest, surpassing its 2014 acquisition of video-game service Twitch International Inc. for $970 million.