10.01.07
In late August, the U.S. District Court for the District of Columbia denied the FTC’s request for a preliminary injunction related to the proposed merger between Whole Foods Market, Inc., Austin, TX, and Wild Oats Markets, Inc., Boulder, CO. According to John Mackey, chairman, CEO, and co-founder of Whole Foods Market, the court’s ruling affirms that a merger between the two companies is a “winning scenario” for all stakeholders. “We believe the synergies gained from this combination will create long-term value for customers, vendors and shareholders, as well as exciting opportunities for team members.”
Gregory Mays, chairman and CEO of Wild Oats Markets, was also pleased with the ruling. “We continue to believe this merger is in the best interest of our stakeholders, as it will mean significant career opportunities for our store associates, capital investment in our stores to enhance the shopping experience for our customers, and value-creation for our shareholders,” he said.
Speaking on behalf of the FTC, Jeffrey Schmidt, FTC competition director, expressed regret at the federal district court decision in the Whole Foods/Wild Oats case, calling it a loss for both consumers and competition. “We respect the Court’s decision, which we currently are reviewing,” he said, adding, “We brought this challenge because the evidence before us showed that the merger would most likely result in higher prices and reduced choices for consumers who shop at premium natural and organic supermarkets.”
To recap, on February 21st this year Whole Foods Market entered into a merger agreement with Wild Oats, pursuant to which Whole Foods Market, through a wholly-owned subsidiary, commenced a tender offer to purchase all of the outstanding shares of Wild Oats at a purchase price of $18.50 per share in cash. However, on June 5th, the FTC authorized its staff to seek a federal district court order to prevent Whole Foods from acquiring Wild Oats. The FTC argued in court in Washington, D.C., on July 31st and August 1st that the merger would violate federal antitrust laws by substantially reducing competition in the market for premium natural and organic supermarkets in several geographic areas throughout the U.S. But now, according to the court’s ruling, the transaction will proceed, pending the FTC’s filing of a request for emergency stay with the district and appellate courts prior to its appeal being heard. The FTC has also authorized the staff to act on its administrative complaint to permanently enjoin the merger.
Gregory Mays, chairman and CEO of Wild Oats Markets, was also pleased with the ruling. “We continue to believe this merger is in the best interest of our stakeholders, as it will mean significant career opportunities for our store associates, capital investment in our stores to enhance the shopping experience for our customers, and value-creation for our shareholders,” he said.
Speaking on behalf of the FTC, Jeffrey Schmidt, FTC competition director, expressed regret at the federal district court decision in the Whole Foods/Wild Oats case, calling it a loss for both consumers and competition. “We respect the Court’s decision, which we currently are reviewing,” he said, adding, “We brought this challenge because the evidence before us showed that the merger would most likely result in higher prices and reduced choices for consumers who shop at premium natural and organic supermarkets.”
To recap, on February 21st this year Whole Foods Market entered into a merger agreement with Wild Oats, pursuant to which Whole Foods Market, through a wholly-owned subsidiary, commenced a tender offer to purchase all of the outstanding shares of Wild Oats at a purchase price of $18.50 per share in cash. However, on June 5th, the FTC authorized its staff to seek a federal district court order to prevent Whole Foods from acquiring Wild Oats. The FTC argued in court in Washington, D.C., on July 31st and August 1st that the merger would violate federal antitrust laws by substantially reducing competition in the market for premium natural and organic supermarkets in several geographic areas throughout the U.S. But now, according to the court’s ruling, the transaction will proceed, pending the FTC’s filing of a request for emergency stay with the district and appellate courts prior to its appeal being heard. The FTC has also authorized the staff to act on its administrative complaint to permanently enjoin the merger.