Amazon said on Friday it has agreed to buy Whole Foods in a deal valued at $13.7 billion, as the e-commerce juggernaut makes its boldest push yet into the grocery business.

Under the terms of the deal, Amazon would pay $42 per share in cash for the company, which represents a 27% premium to Thursday’s closing price.

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue,” said Amazon’s billionaire founder and CEO Jeff Bezos in a statement.

Whole Foods will continue to operate its stores under its brand and John Mackey will remain as CEO. Its headquarters will remain in Austin, Texas.

The organic grocer, which was founded in 1978 and now has more than 460 stores, has come under pressure from investors lately due to sliding sales. It has struggled to attract shoppers as giants like Kroger and Wal-Mart expand their healthy grocery offerings. Its stock has lost a fifth of its value in the last three years.

 In an attempt to appease investors, Whole Foods shook up its board in a major way last month, replacing five directors and bringing in a new chief financial officer. That followed increasing pressure from activist hedge fund Jana Partners, which disclosed an 8% stake in the grocer in March.

“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 Mackey.

For Amazon, the acquisition suddenly gives them a sprawling brick-and-mortar presence and access to well-heeled consumers. The company has been experimenting with groceries, primarily through its AmazonFresh delivery program, but this deal makes clear the size of its ambitions to become a major player in an $800 billion industry.

Amazon has also been testing various retail concepts, including physical bookstores and grocery stores that allow you to exit without going through the traditional checkout process, and could be seen using its Whole Foods stores to peddle its own products like the Kindle and Amazon Echo.

The deal is evidence of Amazon’s financial wherewithal and is easily its largest acquisition to date. “They are paying for the brand value of Whole Foods, the loyalty of the customer base, and its pricing power because a lot of their customers don’t want to shop anywhere else,” says Phil Bak, CEO of ACSI Funds, which has positions in both Amazon and Whole Foods.

The deal is subject to shareholder approval and other closing conditions and is expected to close in the second half of 2017.

Shares of Amazon rose 3% on Friday morning, while shares of Whole Foods surged 27%. Grocery companies were reeling on the news that the fierce, low-cost competitor was getting into the space, with stocks like Kroger, Sprouts and Wal-Mart dropping sharply.

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