Amazon's next step? Buying Target by the end of 2018, analyst predicts

Amazon To Buy Target? That's Loup Ventures' 'Boldest' Prediction For The Year

As an example of how the partnership between Amazon and Target could work, Munster pointed to the ecommerce giant's purchase of Whole Foods to show how the combination of online and offline operations can be utilized. "Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count".

But one local retail expert told The New Daily Amazon's interest in brick-and-mortar takeovers could "bode well" for struggling Australian department stores like Myer, which might find a willing buyer in the American juggernaut. Only 3 percent of the Seattle-based juggernaut's revenue comes from in-person sales, according to a recent L.A. Times report.

Munster said Target's focus on moms is central to Amazon's approach to win wallet share.

Alyssa Julya Smith: What exactly, Gene, would Amazon be getting from Target? Moms, according to Munster. Gene Munster of Loup Ventures wrote in a post earlier this week that the move may come as soon as before the year is out. Amazon has spent campaign dollars targeting the demographic through promotions around Prime along with loading Prime Video with kid-friendly content over the past several years.

As for the antitrust hurdles that Amazon could face, Munster thinks that regulators will be forced to approve the deal once they review the numbers.

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Loup adds a 15% premium to Target's market value and puts the size of an offer at $41 billion.

The company did buy Whole Foods for $13.7 a year ago.

Munster also noted that as far as the demographics at play, the acquisition makes sense. Amazon didn't immediately respond to a request for comment. "This is an area of potential weakness for Amazon, especially as Walmart ramps up its efforts in this area", he said. "However, for any acquisition to work, Target needs to bring something to Amazon that Amazon can not achieve itself". Whole Foods gets it some brick and mortar infrastructure and entrance to the grocery business. Typical of a retail company, Target has invested heavily on land, buildings and fixtures.

He brushed off concerns over competition, telling Bloomberg Radio: "Investors would view this as Amazon taking over the world, and that's a good thing". You could also imagine a lot of integration between Whole Foods products and Target as well as combining the two companies' fulfillment and logistics operations to make them run even smoother.

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