Amazon has cleared two of the biggest hurdles it needed to close its $13.7 billion acquisition of Whole Foods Market, with approvals from a US regulator and the grocery chain's shareholders.
The US Federal Trade Commission said in a statement 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 is on track to close the merger, expected sometime this year. Earlier yesterday, Whole Foods said its shareholders voted in favour of the deal.
Buying Whole Foods gives the world's largest online retailer a foothold in the $700 billion 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.
The marriage between the online retailer and the pioneer organic grocery seller has sent shockwaves through the supermarket industry, already in the midst of a price war.
Much larger grocers like Kroger, with 2,796 retail food stores, and Wal-Mart Stores are racing to add online shopping options so they do not give ground to Amazon.
Meanwhile, they are being forced to discount items as German grocery chains Aldi and Lidl expand in the United States.
"They're definitely under pressure," said eMarketer analyst Patricia Orsini. Without "some sort of e-commerce strategy... you're going to lose those shoppers to a competitor."
Amazon has a loyal and spendthrift following thanks to its shopping club Prime.
However, its decade-long effort to deliver groceries to customers' homes has been unable to unseat brick-and-mortar rivals.
"Prime members are keen to learn the benefits of a bricks-and-mortar approach to Amazon Grocery," said Baird Equity Research analyst Colin Sebastian.
"The deal will close after they sort out more 'back office' issues," he noted.
