On May 29, the Federal Trade Commission (FTC) unanimously granted final approval to the acquisition of Wild Oats Markets, Inc. by Whole Foods Market, Inc. Under the agreed upon settlement between Whole Foods and the FTC, Whole Foods will sell 13 stores in Arizona, Colorado, Connecticut, Missouri, New Mexico, Nevada, Oregon and Utah. The grocer will also sell leases and assets for 19 stores that it had already closed. A divestiture trustee has the responsibility for selling these 32 stores within the next six months to a buyer approved by the FTC. If the trustee is unable to sell the stores within the next six months, the FTC may grant a six-month extension under the settlement.
This final settlement ends a battle between the FTC and Whole Foods that has lasted over two years. When Whole Foods and Wild Oats announced their transaction in February 2007, the FTC began its investigation. In June 2007, the FTC filed suit against the parties and requested a preliminary injunction blocking the acquisition. The FTC argued that the transaction would harm competition in the “natural grocer” market. In August 2007, however, the District Court for the District of Columbia refused to grant the preliminary injunction and the parties consummated the merger shortly thereafter.
The FTC then appealed the decision to the United States Circuit Court of Appeals for the District of Columbia. In July 2008, the D.C. Circuit Court reversed the District Court’s decision, creating an unusual situation in which the FTC could force the parties to “unwind” parts of the already completed merger. The FTC resumed its administrative proceedings over the merger at that point, and the parties finally agreed upon the settlement in March 2009. The FTC allowed time for public comment on the settlement and now has approved it in the form agreed upon in March.
Complete details of the settlement can be found on the FTC website