Filippo Pendin

The purpose of this paper is to propose a merger between Walmart and Wholefoods, respectively the biggest general and natural food retailer in the world. The rationale behind it relates to the improvements that both companies could provide to the other, complementing themselves on a financial, operational and strategic basis. Walmart would increase its product range and attract Millennials, while Wholefoods would improve its operations thanks to a much bigger bargaining power and a lower tax rate among other factors. After an extensive evaluation process, it is concluded that the combined entity, while carrying various risks, will be better off than the two companies on a standalone basis. Based on the model, Wholefoods is valued at around $40,27/share, with the specific value identified by the DCF valuation at $12,8bn. The acquisition price considers a premium price of 24% over the market value for a total cost of $14,56bn. The deal is expected to generate value for $312m thanks to...