FTC to Challenge Wild Oats Acquisition

"Whole Foods Market (WFMI)and Wild Oats Markets (OATS) said Tuesday that they would challenge U.S. antitrust regulators that plan to file a lawsuit aimed at blocking the supermarket chains' proposed merger.

Whole Foods, the largest natural and organic grocer, announced plans to buy Wild Oats in February, after coming under increased pressure from mainstream grocers that were selling more organic, natural and prepared food.

..Now, the FTC is seeking a temporary restraining order pending a federal district court ruling on its request for a preliminary injunction, the companies said Tuesday.

A spokesman for the FTC declined to comment.

Whole Foods and Wild Oats are the leading players in the organic niche of the food retail industry in the United States, but their total food sales pale in comparison to larger retailers such as leaders Wal-Mart and Kroger.

"The FTC has failed to recognize the robust competition in the supermarket industry, which has grown more intense," Whole Foods Chairman and Chief Executive John Mackey said in a statement.

Whole Foods said that the FTC's challenge is based on its contention that the relevant market is limited to natural and organic food stores, excluding other supermarkets. But mainstream grocers have been encroaching on Whole Foods over the past few years, putting pressure on its rapid growth."

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I hope their deal doesn't go through and Wild Oats remains a separate market!