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  • The Amazon Whole Foods Merger – A Personal Perspective

    Jun 21, 2017

    It is rare when a merger of iconic Fortune 200 companies on Wall Street is personally & professionally relevant, but that was the case for me when Amazon’s $13.7 billion acquisition of Whole Foods was announced last week (https://www.bloomberg.com/news/articles/2017-06-16/amazon-to-acquire-whole-foods-in-13-7-billion-bet-on-groceries).

    My first exposure to Whole Foods occurred in the late 1980’s when as a college student at the University of Texas in Austin, I would semi-frequently visit the company’s flagship store at the corner of 6th Street & North Lamar Boulevard in search of unique foreign beers to sample with friends. Two favorites of the time were South Pacific Export Lager from Papua, New Guinea and Grolsch Premium Lager from the Netherlands. Today, Whole Foods is a favorite shopping venue for my family & I with a visit occurring just last week to purchase a couple of briskets for a Texas style BBQ we hosted for several families of friends featuring Central Texas’s, Shiner Beer, in the cooler, another favorite from my Longhorn years. Personally, Whole Foods has been a regular participant in my life for over 30 years supplying a steady stream of quality products with excellent customer service. Professionally, Whole Foods has also played a role in my life. The walking distance from IBA’s corporate office Bellevue, Washington store has served as a regular location for mid-morning coffee meetings with clients & colleagues for multiple years. The large, clean location with inside & outside seating to talk in a relaxed, friendly environment is appreciated. It is amazing how in professional negotiations, a change of setting to a neutral environment can enhance the ability to problem solve through transactional issues between parties. Thank you Whole Foods for providing that tool to IBA. Thank you for also providing an environment for IBA clients to sell their products. Historically, Whole Foods has provided a friendly environment for privately held, Pacific Northwest companies to sell their products. IBA has facilitated transactions where Whole Foods was a significant customer for companies selling baked goods, wine, condiments, and reusable bags. It is my hope that this practice will continue after the merger. Buying local is good practice on multiple levels from helping the local economy & employment to offering diversity to customers.

    The birth of Amazon coincided with my return to the Pacific Northwest in 1994. Personally as a resident of the Seattle metropolitan area, I have known many people who have worked & flourished professionally at Amazon ranging from my cousin, an attorney who negotiated contracts for Amazon, to an Amazon executive who was at my house for the Texas style BBQ to another who fathered boys I coached in baseball & basketball. I am appreciative of the employment opportunities Amazon has provided at a variety of levels. Job creation is an important component to having a healthy American economy. Professionally, I am thankful for the robust retail environment Amazon provides many IBA clients to sell their products. One company being sold by IBA this summer, has seen its revenues & profits soar through selling products to Amazon that are directly sold & warehoused by the company because the retail venue facilitates the company’s ability to sell its products in all 50 states without having to advertise directly in each geographic area. Companies sold by IBA selling products on Amazon have ranged from ones selling music boxes to metal detecting equipment and from orthopedic products to jewelry. Amazon has transformed the retail marketplace creating opportunity for many entrepreneurs that was previously unavailable due to the fixed costs associated with operating a brick & mortar location.

    The only constant in life is change. An Amazon & Whole Foods merger will change retail & grocery. It is my hope as a person that has benefited professionally & personally from association with both companies that tomorrow is better than today for both companies. Their role historically in America has been transformational and the synergistic possibilities created by the merger are exciting. Hat tip to the mergers & acquisitions professionals that put the deal together. M&A does not get any more “Big Time” than this potential transaction.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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