For Release: June 5, 2007
FTC Seeks to Block Whole Foods Market’s Acquisition of Wild Oats Markets
Transaction Would Reduce Competition for Premium Natural and Organic Supermarkets in Locations Nationwide
The Federal Trade Commission today approved a complaint challenging Whole Foods Market, Inc.’s approximately $670 million acquisition of its chief rival, Wild Oats Markets, Inc., and authorized the staff to seek a temporary restraining order and preliminary injunction in federal district court to halt the deal pending an administrative trial on the merits. According to the complaint, the transaction would violate federal antitrust laws by eliminating the substantial competition between these two uniquely close competitors in numerous markets nationwide in the operation of premium natural and organic supermarkets. If the transaction continues unopposed, the FTC contends that Whole Foods is likely to raise prices and reduce quality and services unilaterally.
“Whole Foods and Wild Oats are each other’s closest competitors in premium natural and organic supermarkets, and are engaged in intense head-to-head competition in markets across the country,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “If Whole Foods is allowed to devour Wild Oats, it will mean higher prices, reduced quality, and fewer choices for consumers.”
The Proposed Transaction: On February 21, 2007, Whole Foods and Wild Oats entered into a merger plan under which the former would acquire 100 percent of the voting shares of the latter, with WFMI Merger Co., a wholly owned subsidiary of Whole Foods, merging with and into Wild Oats. WFMI Merger Co. would then commence a tender offer for all shares of Wild Oats common stock and after completion, Whole Foods would merge WFMI Merger Co. and Wild Oats. The combined value of the tender offer and merger and assumed debt is approximately $670 million.
The Commission’s Complaint: The FTC’s complaint charges that Whole...