Amazon is buying Whole Foods in a deal valued at about $13.7 billion, in a move that will help the online retail giant expand its reach into a physical network of grocery stores.

Amazon.com Inc. will pay $42 per share for Whole Foods Market Inc., including debt. That marks an 18 percent premium to Whole Foods' closing price on Thursday.

Whole Foods had been facing increased pressure from rivals, including European grocery chain Lidl, which is planning to enter the East Coast market, along with Aldi and Trader Joe's.

Amazon, meanwhile, has been expanding its reach in goods, services, and entertainment.

The deal is expected to close in the second half of 2017.