{"id":34893,"date":"2017-07-15T05:56:08","date_gmt":"2017-07-15T05:56:08","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=34893"},"modified":"2017-07-15T05:56:08","modified_gmt":"2017-07-15T05:56:08","slug":"u-s-lawmaker-calls-for-hearing-on-amazons-whole-foods-deal","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/technology\/u-s-lawmaker-calls-for-hearing-on-amazons-whole-foods-deal.html","title":{"rendered":"U.S. lawmaker calls for hearing on Amazon’s Whole Foods deal"},"content":{"rendered":"

U.S. lawmaker calls for hearing on Amazon’s Whole Foods deal<\/span><\/strong><\/span><\/h2>\n

The top Democrat on the U.S. House of Representatives’ antitrust subcommittee has voiced concerns about Amazon.com Inc’s (AMZN.O) $13.7 billion plan to buy Whole Foods Market Inc (WFM.O) and is pushing for a hearing to look into the deal’s impact on consumers.<\/span><\/p>\n

The deal announced in June marks the biggest acquisition for the world’s largest online retailer. Amazon has not said what it would do with Whole Foods’ stores and other assets, but analysts and investors worry the deal could upend the landscape for grocers, food delivery services and meal-kit companies.<\/span><\/p>\n

U.S. Representative David Cicilline requested the hearing on Thursday in a letter to the chair of the House Judiciary Committee and the subcommittee chairman.<\/span><\/p>\n

Amazon and Whole Foods declined to comment.<\/span><\/p>\n

Amazon shares closed up 0.1 percent at $1,001.81. Whole Foods rose 0.3 percent to $42.10.<\/span><\/p>\n

“Amazon’s proposed purchase of Whole Foods could impact neighborhood grocery stores and hardworking consumers across America,” the Rhode Island Democrat said in a statement. “Congress has a responsibility to fully scrutinize this merger before it goes ahead.”<\/span><\/p>\n

The deal must be approved by U.S. antitrust enforcers, most likely the Federal Trade Commission.<\/span><\/p>\n

Congress plays no formal role in that process but hearings often highlight the possible impact of deals on consumers. The hearing is unlikely to happen without Republican support.<\/span><\/p>\n

FTC members are named by the president. A wild card in the review is the view of President Donald Trump, who famously said before his election that Amazon has “a huge antitrust problem.” Trump was unhappy about coverage of his campaign by the Washington Post, owned by Amazon Chief Executive Jeff Bezos.<\/span><\/p>\n

Cicilline’s district includes most of the city of Providence, home to United Natural Foods Inc (UNFI.O), which is Whole Foods’ primary supplier.<\/span><\/p>\n

The company, whose supplies account for roughly one-third of Whole Foods sales and has a contract with the retailer through 2025, said it did not ask the lawmaker to intervene. Prior to the Amazon bid, activist investor group Jana Partners had criticized Whole Foods for high costs associated with its United Natural Foods contract.<\/span><\/p>\n

U.S. Representative Ro Khanna, a California Democrat, said in a podcast this month that Amazon’s size and clout could hurt small retailers and eventually lead to higher prices.<\/span><\/p>\n

This week, hedge fund manager Douglas Kass from Seabreeze Partners Management Inc said he was shorting shares of the retailer after hearing rumblings on Capitol Hill about Amazon’s size and clout.<\/span><\/p>\n

“I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C.,” he wrote in a note to investors on Wednesday. “If I am correct, word of this could lower Amazon’s shares by 10 percent overnight.”<\/span><\/p>\n

Kass said in emailed comments to Reuters on Friday that he has what he called a “core” short position in Amazon, meaning a sizeable bet based on a long-term outlook.<\/span><\/p>\n

“This has the potential of being the biggest business news story of year,” he said. Kass declined to comment when asked for more details about pressure from Capitol Hill.<\/span><\/p>\n

Kass is followed for his bets on declines in companies’ share prices. He shorted Marvel Entertainment in 1992 when its shares were in the high $60s, and the company went bankrupt 1-1\/2 years later.<\/span><\/p>\n

He also bet against big U.S. banks leading into the 2007-2009 financial crisis, shorting Bank of America, MGIC, Citigroup and several other financials that ultimately averaged a 98 percent price decline by the time they bottomed in 2009.<\/span><\/p>\n

While antitrust experts have said they expected Amazon’s bid to win regulatory approval, some critics argue the deal should be blocked because it would give the retailer a big head start towards domination of online grocery delivery.<\/span><\/p>\n

source:-http:\/\/www.reuters.com\/article\/us-sprint-corp-investment-idUSKBN19Z263<\/span><\/p>\n

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