Panic in the aisles: Grocery stocks tank as Amazon gets physical with US$13bn Whole Foods takeover

Investors in grocery stocks were in panic mode on Friday as Amazon Inc (NASDAQ:AMZN), 600-pound gorilla of e-commerce, made a US$13.7bn tilt for Whole Foods (NASDAQ:WFM).

Amazon’s disruptive move is set to be the largest ever deal in the grocery sector, though already experts are pointing to the possibility that it may force prices lower across its stores.

READ: The story in full

Wal-Mart Stores Inc (NYSE:WMT) plummeted fell 6%, Costco Wholesale Corporation (NASDAQ:COST) slumped 7%, while Target Corporation (NYSE:TGT) lost more than 7%.

Amazon, meanwhile, rose 3%, while Whole Food jumped almost 30% to settle just a few cents below the US$42 a share offer price.

“This partnership presents an opportunity to maximize 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,” said Whole Foods boss and founder John Mackey.

WATCH: Here’s how CNBC is reporting the deal 

Mackey has been under pressure from a hedge fund called Jana Partners and Neuberger Berman, an investment manager, which has criticized the grocer’s recent poor performance and called for the sale of the business.

Whole Foods is a pioneer of organic food and opened its first store in 1980, in Austin, Texas, home to its headquarters.It has grown to 431 supermarkets employing over 90,000 in the US, Canada and the UK. 

Story by ProactiveInvestors