A new grocery giant has been purchased by Amazon for $4.3 billion in cash and stock, bringing its total stake to $4 billion, a person familiar with the transaction said.
The deal includes the purchase of the German supermarket Gerhard’s, which is owned by German retailer E.W.A.G. The deal also includes the sale of the Italian grocery store La Crociere, which includes a department store, a restaurant and a food court.
The German grocery store is owned and operated by the German conglomerate Heinz, and the Italian restaurant and food court are operated by Italian grocer L’Espresso.
Gerhard’s was the biggest single customer at Amazon’s online grocery business, which has grown to more than 1 billion customers, and is one of its biggest suppliers of fresh food products.
The company also owns the Italian groceries and restaurants, as well as the Italian department store and the restaurant.
Gerhardt’s, a chain of supermarkets in Germany, Italy, France and Belgium, was the first of its kind to go public in 2016, when it raised $1.1 billion in financing from German investors.
Its market capitalization is estimated at $6.5 to $8 billion, according to Bloomberg.
The grocer has grown into a global leader in fresh food sales and was one of the world’s largest retailers by revenue in the first half of 2018, according a report by consulting firm Deloitte.
It’s unclear what the new deal will mean for the grocery chain, which sells everything from fresh produce to groceries, and has a presence in more than 60 countries.
Its stock has dropped over the last year amid a weakening economy.
It closed at $15.85 on Friday, and analysts are calling for a buyback, although they have no firm date for when such a buyout will take place.
Gerard Ziegler, a grocery market analyst with consultancy S&P Global Ratings, said the deal could give Amazon a greater foothold in grocery sales.
“The combination of these two combined entities will allow Amazon to make significant gains in grocery,” Ziegling said.