F.T.C. challenges Whole Foods and Wild Oats merger
June 05, 2007
by FoodBusinessNews.net Staff
AUSTIN — The Federal Trade Commission filed a complaint in the U.S. District Court for the District of Columbia to block Whole Foods Market’s proposed acquisition of Wild Oats Markets.
The F.T.C. also asked the court to enter a temporary restraining order prohibiting Whole Foods from completing the acquisition of shares of Wild Oats until the court resolves the F.T.C.’s request for a preliminary injunction.
The F.T.C.’s challenge comes from concerns that the relevant antitrust product market is limited to natural and organic food stores and excludes other supermarkets.
"We are very disappointed by this decision, and we intend to vigorously challenge the F.T.C. in court," said John Mackey, chairman and chief executive officer of Whole Foods. "The F.T.C. has failed to recognize the robust competition in the supermarket industry, which has grown more intense as competitors increase their offerings of natural, organic and fresh products, renovate their stores and open stores with new banners and formats resembling While Foods Market."
Wild Oats and Whole Foods entered a merger agreement on Feb. 21. Whole Foods, through a subsidiary, is completing a tender offer to purchase all outstanding shares of Wild Oats for $18.50 per share in cash. Currently, the expiration date for the tender offer is June 20, but Whole Foods anticipates announcing that it will extend this date soon.
"We continue to believe very strongly that this merger is in the best interest of all our constituents," said Greg Mays, chairman and c.e.o. of Wild Oats Markets. "Our associates will benefit from greater opportunities working for a larger combined company, our shareholders will benefit from value creation, and our consumers will benefit from a stronger product offering and the capital investment to upgrade our stores."