US grocer Whole Foods Market for $13.7 billion
NEWYORK:Amazon is once again shaking up the retail sector, with the announcement on Friday it will acquire upscale US grocer Whole Foods Market, known for its pricey organic options, in a deal that underscores the online giant’s growing influence in the economy.
In the $13.7 billion all-cash deal, Amazon will buy the Texasbased champion of organic and specialty food for $42 a share.
Whole Foods, which has faced pressure from activist investors, will continue to operate stores under its brand and will be led by co-founder and CEO John Mackey, the companies said.
“This partnership presents an opportunity to maximise value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” Mackey said.
The announcement had immediate and punishing consequences on Wall Street for retailers, such as Wal-Mart Stores, that sell groceries and are expected to face even tougher competition with Amazon now much more active in the space.
In May, under pressure from Jana Partners, Whole Foods replaced five board members and its chief financial officer. The hedge fund said the company was undervalued and needed to overhaul its operations and consider “strategic alternatives,” code for a sale.
Mackey, who has viewed Whole Foods as a “missiondriven” company in improving American food, castigated Jana as an example of craven capitalism. Mackey is famous for growing Whole Foods from a tiny health-conscious grocer in Texas far from the US coasts into a giant in upscale foods.
The deal is the latest big move for Amazon and CEO Jeff Bezos, who grew Amazon from a small online bookseller in the 1990s into a global retail behemoth that delivers a wide range of goods and creates award-winning entertainment broadcasts.
“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” Bezos said. BENGALURU: Infosys Ltd America’s head and global head of manufacturing, consumer packaging and goods and retail units, Sandeep Dadlani, has resigned, in a big setback to chief executive officer (CEO) Vishal Sikka.
Sikka had recently entrusted Dadlani with the additional responsibility of generating more business from the company’s new software solutions, including artificial intelligence platform Nia.
Dadlani, who was one of the four presidents at Infosys, was overseeing business amounting to 34%, or $3.5 billion of Infosys’s $10.2 billion revenue, and was also the chairman of Edgeverve, a subsidiary of Infosys, India’s second-largest computer services firm.
The reason behind Dadlani’s departure is not clear although he is learnt to have put in his papers last week, according to a person familiar with the development who requested anonymity. “Sandeep has played a key role in the success of Infosys over his career and in our transformation journey these past three years. We wish him the best in the journey ahead,” Sikka said in a statement.
The company announced the appointment of Karmesh Vaswani as head of retail, consumer packaging and goods, and logistics, and Nitesh Banga as the head of manufacturing.
Dadlani, who joined Infosys in January 2001, was the front-runner to take the top job at Infosys in 2014 when Infosys scouted for a CEO, before eventually deciding to hire former SAP SE board member Sikka.
Dadlani’s departure is a blow to Sikka who is battling against time to put Infosys back on the growth pedestal, as an embattled board and management face questions on poor corporate governance from some of the company’s founders led by NR Narayana Murthy.
This latest exit is important for two reasons. First, it puts a question mark on Sikka’s stint as CEO. Nine executives of the rank of executive vice-president (EVP) and above have quit Infosys since he took over as Infosys’s first non-founder CEO in August 2014.
“Sandeep’s exit is of concern because it suggests that Vishal is finding it difficult to retain his senior management team,” a Mumbai-based analyst at a foreign securities house said on condition of anonymity. “This despite the fact that Infosys is paying a handsome salary to all its senior executives.”
Many executives in the past have questioned Sikka’s management style, and whether he is finding it difficult to build a stable senior management team.
Second, Infosys, like its other Indian IT competitors, is seeing less business from retail giants Wal-Mart Stores Inc. and Best Buy Co. Inc., as traditional retail companies try to fend off competition from the rise of e-commerce companies like Amazon as more people opt to buy online.
Retail companies are the second-largest buyers, behind banks and financial services clients, for services from homegrown technology firms, and Infosys losing its senior-most executive managing business from retail clients is another worry for Sikka.
Shares of Infosys fell 1.24% to ₹940.50 at the close of trading on the BSE on Friday. The benchmark Sensex edged down 0.06% to 31,056.40 points.