When companies merge, the governmental approval process doesn't really focus on the size of either company, rather the market share control that will develop as a result. That's the snag that Austin, Texas-based Whole Foods Market is facing with the Federal Trade Commission. Whole Foods wants to absorb Wild Oats Markets, and FTC plans to try to block the merger of the two leading U.S. "natural" food retailers.
The FTC will file a complaint in the U.S District Court for the District of Columbia and seek a temporary restraining order that would prohibit Whole Foods from completing its acquisition of Denver-based Wild Oats' shares on antitrust concerns, reports Whole Foods' officials.
Under the terms of the deal, announced last February, Whole Foods would pay $18.50 per share in cash and assume $106 million in Wild Oats' debt. Expectations were to seal the deal in April.
"We are very disappointed by this decision, and we intend to vigorously challenge the FTC in court," says John Mackey, chairman of Whole Foods. "The FTC has failed to recognize the robust competition in the supermarket industry, which has grown more intense as competitors increase their offerings of natural, organic and fresh products."
Source: Whole Foods, Meatingplace.com