Following six months of scrutiny by the Federal Trade Commission, and some questionable actions by Whole Foods' chief executive officer, the No. 1 natural foods retailer has completed the purchase of No. 2. FTC tried to stop the two natural foods chains from joining forces, but couldn't stop the $565-million transaction. Wild Oats will become a wholly owned subsidiary of Whole Foods.
FTC officials had argued that the merger would give Whole Foods an unfair competitive advantage in the natural foods niche. The argument that Whole Foods' hung its hat on centered on the fact that the natural and organic market is moving mainstream into traditional grocery chains, thereby broadening the competitive landscape. A federal appeals court dismissed the FTC's position.
Whole Foods has stores in 11 regions and will gain more stores. It will become dominant in three of smallest region; it also will provide Whole Foods with immediate entry into several new markets.
Based in Austin, Texas, Whole Foods has 307 stores in the United States, with sales of $5.6 billion in fiscal year 2006. Wild Oats, based in Boulder, Colo., has 109 stores in 23 states and British Columbia, Canada. Its annual sales run about $1.2 billion, reports Meatingplace.com.
Source: Whole Foods Markets, Meatingplace.com