“Alexa, what should we buy next?” : the proposed acquisition of Ulta by Amazon

• Autor(a) principal: Almirante, Sofia Margarida da Silva
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/25463
• topic: E-commerce; Mergers and acquisitions; Omnichannel retailing; Comércio eletrónico; Fusões e aquisições; Retalho omnicanal; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

E-commerce has rapidly grown for the past 20 years and while some traditional retailers could not survive the fierce competition, others were able to adapt and opened their own online stores. For the past decade, this has been the prevailing trend in the retail environment. In recent years, however, we have been witnessing to the inverse, retailers going from clicks to bricks. Amazon is known for having completed a high number of M&A transactions since its inception. The last one, in 2017, was the acquisition of Whole Foods Market and it shook the entire retail industry, as fears regarding a possible entrance by the e-commerce leader in the brick-and-mortar space spread. The purpose of this dissertation is to analyse Amazon’s acquisition of Ulta, the leading U.S. beauty specialty retailer, as part of the company’s quest for an omnichannel presence. The in-store experience in the $445Bn beauty industry is of major importance and Ulta’s 1070 stores in the U.S. and 28 years of experience in the field stand as valuable opportunities for Amazon. The recommended bid price is $331,2 per share, which includes a 30% premium over the market price at the 21st May 2018. This value is justified by net synergies of $4.123Mm and a $373Mm value of control. The transaction should be a cash deal carried as a friendly takeover and has the potential of creating $863.1Mm for Amazon’s shareholders and an accretion of 12,4% in the first year’s EPS.