Business

Amazon's Whole Foods deal is facing major flak

25 Jul 2017 | By Anish Chakraborty

It appears that US regulators need more time to okay Amazon's $13.7bn (£10.5b) acquisition of Whole Foods. This delay is due to the anti-trust concerns raised by certain groups.

Whole Foods had informed investors that the deal was expected to be closed in second half of this year, however, chances are now it may stretch to May 2018.

Here's more about it.

In context: Amazon's Whole Foods deal hits a roadblock

25 Jul 2017Amazon's Whole Foods deal is facing major flak

DemocratsWhat's the hiccup?

Despite analysts opining that this deal would benefit consumers, as it would lead to lower prices and delivery innovations, Democrats have asked regulators to take a second look at how it affects consumers' choices, particularly in places that have few food shopping options.

Rising concerns about consolidation and the effects it may have on US industries have invited scrutiny on this proposed merger.

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Even Trump has something to say

POTUSEven Trump has something to say

Amazon will still face competition from major industry behemoths, such as Walmart, Target, and others but Democrats, who have anti-trust concerns as a part of their economic agenda, are wary of the merger.

Even during the presidential campaigning, POTUS Trump was quoted saying that Amazon had a "huge anti-trust problem".

The deal will go through, analysts believe, but it will take time.

ConcernsConcerns raised

The e-commerce giant plans on resubmitting merger paperwork to the Federal Trade Commission this week, after re-setting the deadline for a preliminary government review.

Following Amazon's takeover announcement, rival supermarkets saw their share prices taking a huge fall.

As it is, there has been consolidation in this industry causing the closure of smaller stores. Retailers believe that this new entry would accelerate this phenomenon.

AllegationsMajor allegations

Democratic Rep. David Cicilline asked Congress to conduct investigations on this deal, as it "raised important questions concerning competition policy."

Another group said, it "should be scrutinized beyond the normal antitrust review process that only examines the competitive impact."

Consumer Watchdog has asked for a halt until Amazon changes product listing practices.

Moreover, three shareholders have filed class-action suits, saying it undervalues Whole Foods.