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Amazon Acquires Kiva Systems in Second-Biggest Takeover

March 19

Danielle Kucera

Amazon.com Inc. (AMZN) is making its biggest acquisition since the 2009 purchase of Zappos.com, agreeing to pay $775 million for Kiva Systems Inc., a maker of robots that move items around warehouses.

The all-cash deal for closely held Kiva will close in the second quarter, Seattle-based Amazon said today in a statement. Kiva’s orange robots, which can slide under shelves and bins of products, are used by Quidsi Inc. — the company behind Soap.com and Diapers.com that Amazon acquired for about $545 million last year.

The takeover of Kiva by the world’s largest online retailer will add to investments Chief Executive Officer Jeff Bezos has made in the company’s order-fulfillment centers, as Amazon seeks to get a bigger variety of products to consumers faster. Amazon spent $4.6 billion last year on warehouses — the company’s largest operating expense at 9.5 percent of sales, according to its annual report.

“It’s an internal infrastructure play, and it comes at a time when their headcount has been growing faster than revenue,” Colin Gillis, an analyst at BGC Partners LP in New York, said in an interview. “One of the knocks on Amazon is that their fulfillment is an expensive, manual process. They’re not getting the benefits of scale. So they’re taking some steps towards it.”

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