Question

Analyze the merger “Amazon to acquire Whole Foods in a deal valued at $13.7 billion” from the perspectives of both companies’ shareholders.

Answer 1

Amazon buying Whole Foods merger from Amazon’s Shareholders:

Positive:

Instantnew marketplace share (moving from only retail/online to national grocery store) à More money for shareholders

Access to grocery distribution center à Ability to gain more market share by buying other grocers

Goodinvestment à More money in the long run due to brick-and-mortar locations, established networks, more versatility

Ability to compete with other retailers à Walmart, Target

Negative:

Combining two companies à Since a significant amount of money and risk is associated with the merger.

There can be differences in corporate culture that are not easy to consolidate: It is very much difficult to combine the corporate culture between the two.

It creates distress within the employee base of each organization: Due to posts duplicacy there is a chance layoffs, which would place people out of work for an indefinite period of time and this creates chaos among the employees.

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