Amazon wins regulatory and shareholder approval for Whole Foods deal

Amazon.com has cleared two of the biggest hurdles it needed to close its US$13.7 billion (Dh50.3bn) acquisition of Whole Foods Market, with approvals from a US regulator and the grocery chain’s shareholders.

The US federal trade commission it would not pursue its investigation into the proposed merger further after reviewing whether the deal would substantially lessen competition or constituted an unfair method of competition.

Amazon said it was on track to close the merger, expected some time this yea. On Wednesday, Whole Foods said that its shareholders had voted in favour of the deal.

Buying Whole Foods gives the world’s largest online retailer a foothold in the $700bn US grocery market, key for it to grab a greater share of shoppers’ wallets. It also gives Amazon more than 465 brick-and-mortar stores where it could showcase products and ready packages for home delivery.

Anti-trust experts had expected the deal to win government approval because Amazon sells few groceries currently and Whole Foods itself makes up a small fraction of US food sales.

Some critics, however, had argued that the government could attempt to block the merger since Amazon might leverage its retail and supply chain power to dominate a new market.

“You don’t normally see cases on theories that are speculative,” said Richard Feinstein, who headed the FTC’s bureau of competition under the former president Barack Obama.

That has not stopped some in political office from questioning the merger.

Last month, the top Democrat on the US House of Representatives’ anti-trust subcommittee voiced concerns about the plan and sought a hearing to look into the deal’s impact on consumers.

Amazon has frequently been in the crosshairs of president Donald Trump, who last week took aim at the company over taxes and jobs, without offering evidence. The retailer’s CEO, Jeff Bezos, owns The Washington Post, which Mr Trump has also frequently criticised.

The FTC opted not to make a second request for information about the deal, which is often a burden for companies that have to provide extensive information that can drain time and resources to collect. Such requests have in the past led to concessions so a merger gains government approval.

“The FTC quickly decided that the combination did not create a significant danger of lessening competition in any market,” said Erik Gordon, a business professor at the University of Michigan.

Consumer Watchdog, a group that had urged the FTC to take action to block the merger, said it was disappointed. “Apparently the only way to hold Amazon accountable for its abuse of consumers is at the state level,” the group said. Reuters