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Amazon May Buy Target In 2018

12 January 2018

Is Target the next big buyout for Amazon?

Gene Munster the Co- founder of Loup Venture believes that the big online retailer will acquire the struggling discount store retailer Target, similar to their acquisition of Whole Foods a grocer that was acquired for $17.5 billion a year ago. You see that Amazon sees a future where it's mostly online with some offline. Prominent analyst Gene Munster is predicting that Amazon's next move could be its expansion into the physical retail space with a takeover of Target this year.

"Getting the timing on this is hard, but seeing the value of the combination is easy", Munster wrote. If Amazon were to acquire Target, the retailer could also complement the company's grocery business with Whole Foods.

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Neither Amazon or Target commented on the story. Amazon already bought Whole Foods, and according to the prediction, it's not done with traditional retailers. Shares of Target jumped more than 3.5 percent on Tuesday morning following the note. Year-to-date, AMZN has declined 0.00%, versus a 0.31% rise in the benchmark S&P 500 index during the same period. The only competitor that truly gives Amazon any competition is Walmart with its 11,695 locations and $US315 ($402) billion in U.S. sales, according to Munster.

Munster said Amazon has "aggressively pursued" the family market with promotions for kid-friendly video content. Amazon could gain access to a strong brand, a network of upscale stores and also an immediate expansion of its distribution network, which could lead to a rapid expansion of the AmazonFresh delivery service.

And if that sounds a bit like Amazon moving one step closer to taking over the world and that concerns you, Munster reminds you that there's another group of people who like the sound of that.

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Of course, Amazon would have to make it past the Trump administration's review of a Target acquisition, and Trump is no fan of Bezos and his newspaper The Washington Post. He's long predicted that Apple will release its own TV at some point and has pushed rumors that the company will produce its own auto, both of which have yet to come to fruition.

"Amazon has to chew and swallow before it can really take another bite of anything else", she said. The commander-in-chief would certainly be vocal in his opposition to any deal Amazon might want to make, but whether that would be enough to kill a deal is arguable. "Are the Target customers more frequent shoppers with larger carts than the same shoppers when they shop with Amazon?". Last month, CFRA bank analyst Ken Leon wrote that he foresees the Internet company buying a small- or mid-sized bank in 2018.

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Amazon May Buy Target In 2018