Court puts Whole Foods/Wild Oats deal on hold, awaiting more arguments
A federal appeals court said Monday it needs more time to consider whether to block Whole Foods Market’s takeover of rival Wild Oats Markets, the Associated Press reported.
The U.S. Court of Appeals for the District of Columbia Circuit temporarily put on hold the $565 million deal until it can hear more arguments. The three-judge panel said, however, the decision "should not be construed in any way as a ruling on the merits" of the case.
The Federal Trade Commission on Friday had asked the court to stay a decision by U.S. District Judge Paul L. Friedman that allowed the transaction to proceed.
According to the court, Whole Foods is blocked "from taking any further steps to acquire the stocks, assets or any other interest" in Wild Oats until the appeals court issues a further ruling. The FTC is attempting to block the deal, claiming antitrust issues.
The FTC has until Wednesday afternoon to explain to the court why the stay is necessary. Whole Foods will have until Thursday to respond. The accelerated schedule suggests the court plans to move quickly.
"If we’re allowed to go through and close this transaction, we’re going to do so," Whole Foods’ chief executive John Mackey said at the end of July. "We’ll start closing stores and integrating the companies ... Once the eggs get scrambled, they’re kind of hard to unscramble."
The FTC sued in June to block the deal on antitrust grounds, arguing that the two chains compete in a narrow market of "premium, natural and organic supermarkets," and the combination would stifle competition and lead to higher prices.
The deal wouldn’t hurt consumers, both companies claim, because of competition from conventional supermarkets, such as Safeway and Kroger, which are selling increasingly larger amounts of organic products.