Whole Foods, F.T.C. reach settlement on Wild Oats acquisition
March 06, 2009
by FoodBusinessNews.net Staff
WASHINGTON — Whole Foods Market, Inc. will sell 32 premium natural and organic supermarkets and related assets in a settlement with the Federal Trade Commission concerning Whole Foods’ acquisition of Wild Oats Markets, Inc. in August of 2007. The 32 stores include 19 non-operating former Wild Oats stores, 12 operating acquired Wild Oats stores and one operating Whole Foods Market store.
The settlement will restore competition in 17 geographic markets impacted by the acquisition, according to the F.T.C. Whole Foods also is required to divest related Wild Oats intellectual property, including unrestricted rights to the "Wild Oats" brand.
"As a result of this settlement, American consumers will see more choices and lower prices for organic foods," said Jon Leibowitz, chairman of the F.T.C. "It allows the F.T.C. to shift resources to other important matters and Whole Foods to move on with its business."
The F.T.C. had charged that Whole Food Market had violated federal antitrust laws in its Aug. 28, 2007, acquisition of Wild Oats Markets. The settlement agreement announced March 6, 2009, has been placed on public record for a 30-day comment period ending April 6. The F.T.C. then will issue a final ruling. A third-party divestiture trustee has been appointed to sell the assets.
Whole Foods Market expects to record a non-cash charge of about $19 million or less relating to the potential sale of the 13 operating stores, which had combined first-quarter sales of about $31 million, or about 1.3% of the company’s total first-quarter sales of $2.5 billion. The 13 operating stores include five in Colorado, two in Arizona and one each in Connecticut, Missouri, New Mexico, Nevada, Oregon and Utah.
"We are pleased to have reached a mutually-satisfactory agreement with the F.T.C.," said John Mackey, chairman, chief executive officer and co-founder of Whole Foods Market. "We believe it was in the best interests of all our stakeholders to resolve this matter so we can dedicate our full attention to selling the highest quality foods available in our inviting store environments."