Gene Munster Thinks Amazon Will Buy Target

4. January 2018.








The early part of a new year is always rife with predictions, and venture capital firm Loup Ventures co-founder Gene Munster deserves credit from coming out of the dugout with a great big win.

Munster is predicting Amazon’s Whole Foods acquisition in 2017 was just a warm up to the real show, and that a takeover of big-box retailer Target is in store for the eCommerce giant in 2018. He wrote as much in a new report highlighting eight predictions for the technology industry in 2018.

“Target is the ideal offline partner for Amazon for two reasons: shared demographic and manageable but comprehensive store count,” Munster wrote, noting both companies focus on mothers and families. “Getting the timing on this is difficult, but seeing the value of the combination is easy.”

Munster believes the buy would make it past regulator muster, as Walmart alone would still carry a larger share of the retail market than the potential Amazon and Target merger. In fact, he estimated a valuation of $41 billion, or a 15 percent premium to Target’s value.

“Investors would view this as Amazon taking over the world and that’s a good thing,” Munster said in an interview on Bloomberg Radio.

Target and Amazon have both declined requests for comment on the prediction.

Speculating on what Amazon is going to buy next has become something of a favored hobby among retail watchers, with pretty much any mark other than Walmart seeming a valid possibility. Athleisure companies Lululemon and Athletica Inc., clothing brand Abercrombie & Fitch Co., home goods firm Bed Bath & Beyond Inc. and automotive products company Advance Auto Parts Inc. have all be discussed as potential acquisitions for the digital marketplace.

Not everyone is thinking Amazon’s next move will be another big retail deal, though. Some analysts have speculated the firm may turn its attention toward acquiring or partnering with a bank.

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