Whole Foods, FTC settle on Wild Oats
Premium organic grocer Whole Foods Market Inc has settled an antitrust battle with U.S. regulators by agreeing to sell the Wild Oats brand, 13 functioning stores, and leases and assets for 19 closed stores.
The Federal Trade Commission had challenged Whole Foods’ purchase of smaller rival Wild Oats well before the deal was completed in August 2007, saying it was concerned about loss of competition in 29 markets.
Under a settlement announced by the two sides on Friday, the 13 functioning stores to be sold include 12 Wild Oats stores and one Whole Foods store. Among the 19 closed stores, all of them Wild Oats outlets, some were shut down before the merger was concluded and some after.
The sale of assets will be carried out by a third-party trustee.
Whole Foods (WFMI, Fortune 500) shares see-sawed following news of the settlement. They were up 13 cents at $11.91 in late-morning trading on Nasdaq.
"We’re getting relief in 17 (markets). It substantially restores the competition that was lost," said David Wales, director of the FTC’s Bureau of Competition.
"This is a unique situation where the parties have already consummated the deal," said Wales.
The settlement is subject to a 30-day comment period ending April 6, after which the FTC will issue a final ruling payday loan no faxing.
Whole Foods expects a noncash charge of $19 million or less for the sale of the 13 stores in operation.
"We are pleased to have reached a mutually satisfactory agreement with the FTC. We believe it was in the best interests of all our stakeholders to resolve this matter," said John Mackey, chairman and and co-founder of Whole Foods.
The deal settles legal battles between the FTC and Whole Foods both within the agency’s administrative process and in the courts.
Whole Foods had argued in one case that the agency, one of two that enforce antitrust law, had publicly prejudged the merger and that it was unfair that the FTC and Justice Department had different procedures for assessing whether mergers are legal.
Whole Foods has previously said the merger was complete, except for changing a half-dozen signs.
The FTC previously said that up to 50 stores could be sold, including Wild Oats and legacy Whole Foods stores as well as their distribution channels, as a remedy to the antitrust issues.
Filed under: marketing by Fred