Amazon employee talking to customer
Source: Amazon

Amazon’s 2022 Acquisitions Have Included Some Big Names

Mohit Oberoi, CFA - Author
By

Aug. 8 2022, Published 5:24 a.m. ET

Amazon has been growing its business both organically and organically. Whereas Whole Foods, which Amazon acquired in 2017, remains its largest acquisition, the company has announced several deals this year, including a couple of billion-dollar deals. Let's look at Amazon’s 2022 acquisitions.

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In 2021, Jeff Bezos quit as Amazon’s CEO and transitioned to the role of executive chairman. Andy Jassy, who was heading Amazon’s cloud business, became CEO, and under his watch, the company has announced several acquisitions.

Amazon accquired MGM Holdings in March 2022

Amazon acquired MGM Holdings in March 2022. The $8.5 billion deal, the company's second largest, was announced in May 2021 (so, it's more of a 2021 acquisition). With the MGM deal, Amazon strengthened its Prime offerings. The company has raised its Prime prices in both U.S. and Europe in 2022, and to compete win the streaming market, it needs to add content to its platform.

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amazon prime
Source: Amazon

Amazon has announced multiple acquisitions in 2022

Amazon's 2022 acquisitions include:

  • Veeqo.
  • GlowRoad.
  • One Medical.
  • iRobot.

Amazon has also taken a stake in GrubHub. Amazon Prime subscribers in the U.S. got a free one-year GrubHub subscription as part of the two companies' agreement.

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Veeqo is an e-commerce software startup based in the U.K. It was a privately held company and Amazon hasn't revealed the acquisition price. GlowRoad is an Indian social commerce company that Amazon acquired in an all-cash deal.

amazon grubhub deal
Source: GrubHub Twitter
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One Medical was Amazon's third-largest acquisition

In July, Amazon announced the acquisition of One Medical for $3.9 billion. The acquisition was at a significant premium to One Medical’s then stock price. With the acquisition, Amazon increased its focus on the telehealth business. Commenting on the One Medical Acquisition, Amazon Health Services SVP Neil Lindsay said, “We think healthcare is high on the list of experiences that need reinvention.” Amazon is known to disrupt the industries that it enters.

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However, contrary to expectations, Teladoc Health stock didn't crash following the announcement. (When Amazon announced its partnership with GrubHub, Uber and DoorDash tumbled. Similarly, grocery stocks slumped following Amazon’s Whole Foods acquisition.)

iRobot is Amazon's most recent acquisition

In Aug. 2022, Amazon announced the acquisition of iRobot for $1.7 billion. The company makes Roomba vacuum cleaners. The all-cash deal was at a significant premium to iRobot’s stock price.

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Growth companies, both listed and private space, have seen their valuation come down drastically. iRobot, for instance, was trading above $133 in early 2021, more than double the $61 per share that Amazon is now buying it for.

With the lower valuations, some former market favorites could be acquisition targets. Apple, Nike, and Amazon are all rumored to be interested in Peloton. Apple has said that it would look at acquisitions if they make strategic sense, but for now, is rewarding its stockholders with generous buybacks.

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