Court clears way for Whole Foods merger
Sunday, 26 August 2007
WASHINGTON, Aug 25 (AP): A federal appeals court Thursday cleared the way for Whole Foods Market Inc. to buy rival organic grocer Wild Oats Markets Inc.
The three-judge panel of the US Court of Appeals for the District of Columbia Circuit denied a request by the Federal Trade Commission to delay the US$565 million sale pending the outcome of an appeal. Whole Foods lawyers argued that such a ruling would have killed the deal.
US District Judge Paul L. Friedman refused to step in last week and block the transaction, a decision that federal regulators quickly appealed. They claimed that if the two companies combine, it would mean less competition and higher prices for premium and organic food.
The appeals court, in a brief ruling, agreed that the FTC "raised some questions" about the deal, but the judges said the agency had not proven that Friedman's decision was flawed.
In his 93-page ruling, Friedman rejected the FTC's argument that the two stores compete in a narrow market of "premium, natural and organic supermarkets." He said supermarket chains such as Safeway Inc. and Kroger Company are selling more fresh and organic produce and redesigning many of their stores to compete with Whole Foods.
The three-judge panel of the US Court of Appeals for the District of Columbia Circuit denied a request by the Federal Trade Commission to delay the US$565 million sale pending the outcome of an appeal. Whole Foods lawyers argued that such a ruling would have killed the deal.
US District Judge Paul L. Friedman refused to step in last week and block the transaction, a decision that federal regulators quickly appealed. They claimed that if the two companies combine, it would mean less competition and higher prices for premium and organic food.
The appeals court, in a brief ruling, agreed that the FTC "raised some questions" about the deal, but the judges said the agency had not proven that Friedman's decision was flawed.
In his 93-page ruling, Friedman rejected the FTC's argument that the two stores compete in a narrow market of "premium, natural and organic supermarkets." He said supermarket chains such as Safeway Inc. and Kroger Company are selling more fresh and organic produce and redesigning many of their stores to compete with Whole Foods.