Almost a year after Whole Foods purchased the 110-store Wild Oats chain for $565 million, a three-judge panel of the U.S. Court of Appeals in Washington overturned a lower-court ruling that allowed
the merger to go through. The ruling was a surprise to antitrust experts.
When the two companies announced plans to merge in early 2007, the Federal Trade Commission moved to block the
deal, arguing that it would give Whole Foods too much of the organic and natural foods market. A federal district court ruled against the FTC, saying it had not made a case for delaying the merger.
Specifically the panel says the lower court erred when it ruled that the FTC's definition of what constitutes the market for natural and organic foods was too narrow.
Whole Foods says it
is evaluating its legal options, and it notes that "the decision acknowledges that neither the court nor the FTC has found the merger to be unlawful." It has already rebranded most of the Wild Oats
stores, sold 35 more and closed 12. There are still 15 that use the Wild Oats name but they will be converted soon.
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