Resistance Against Amazon's Whole Foods Acquisition Builds
SEATTLE — The news that Amazon.com reached an agreement to acquire Whole Foods Market Inc. echoed throughout the retail industry one month ago. But the pending deal is facing some opposition.
U.S. Rep. David Cicilline (D-R.I.) has called for a hearing on the acquisition which would join the Seattle-based ecommerce giant with Austin, Texas-based Whole Foods. Cicilline has argued that the proposed merger could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace, as Convenience Store News' sister publication Progressive Grocer reported.
"Competition is essential for a healthy economy — that's true across the board," he said. "Amazon's proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America. Congress has a responsibility to fully scrutinize this merger before it goes ahead. Failing to do so is a disservice to our constituents."
The transaction, Cicilline said, occurs during a long period of economic concentration that already has caused a decline in worker wages and mobility, essentially allowing a small number of monopolists to hoard the "fruit of economic growth."
Cicilline shared other concerns, too, including one regarding suggestions of increased automation and resulting job losses, thus threatening America's 16-million-strong service and retail workforce.
Cicilline's call for a hearing on Capitol Hill comes as a Whole Foods shareholder alleges the deal undervalues Whole Foods.
The approximately $13.7-billion definitive agreement carries a $42-per-share price tag in an all-cash agreement.
Robert Riegel filed a lawsuit in the U.S. District Court for the Western District of Texas claiming the grocer's July 7 proxy statement was "misleading," "failed to disclose information important to stakeholders" and "failed to disclose how the company calculated certain valuations," Progressive Grocer reported.
"The proxy statement states that, in connection with negotiating the merger agreement, Amazon had preliminary discussions with certain Whole Foods executive officers regarding Amazon's desire to retain such officers following the closing," the suit noted. "However, the proxy fails to disclose the timing and nature of all communications regarding the future employment and/or benefits relating to Whole Foods management."
The lawsuit requests that the court block the acquisition by Amazon and seeks class-action status.