Amazon's biggest bet yet will test Jeff Bezos' ability to absorb another company into the e-commerce giant.
Amazon's $13.7 billion tie-up with Whole Foods is 14 times larger than Amazon's 2014 deal to buy video game streaming platform Twitch for $970 million, including debt. Its scale presents challenges to Amazon in a way prior deals -- for companies that tended to be managed independently -- have not.
"This is a much more transformational acquisition," Ben Schachter, an internet analyst at Macquarie, told CNBC in a phone interview. It "may add a fourth pillar to the Amazon ecosystem."
Analysts say Whole Foods solves Amazon's problem of trying to develop grocery delivery through its Amazon Fresh business, which has struggled to grow over the last decade even as Bezos made Prime a key part of the Amazon empire.
Whole Foods' network of food stores solves a disconnect that had existed between Prime customers and the nascent food business, analysts said.