Whole Foods To Separate Self From Wild Oats In FTC Settlement

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Written by Healthy Newspaper

Thursday, 12 March 2009 17:01

Austin, Texas, March 2009 – Whole Foods Inc. said last week it has reached a settlement agreement resolving the Federal Trade Commission’s (FTC) antitrust challenge to the Austin-based retailer's August 2007 acquisition of Wild Oats Markets, Inc. Pursuant to FTC protocol, the settlement agreement has been placed on public record for a 30-day comment period ending April 6, after which the FTC will issue a final ruling. Under the terms of the agreement, a third-party divestiture trustee has been appointed to market for sale: * leases and related assets for 19 non-operating former Wild Oats stores, 10 of which were closed by Wild Oats prior to the merger and nine of which were closed by Whole Foods Market; * leases and related fixed assets (excluding inventory) for 12 operating acquired Wild Oats stores and one operating Whole Foods Market store; and * Wild Oats trademarks and other intellectual property associated with the Wild Oats stores. The divestiture trustee will have six months to market the assets to be divested. For any good faith offers not finalized by the divestiture trustee during the six-month period, an extension of up to six months may be granted. This twelve month period may be further extended to allow the FTC to approve any purchase agreements submitted within that time period. The only other obligations on the company imposed by the settlement agreement are in support of the divestiture trustee process. “We are pleased to have reached a mutually-satisfactory agreement with the FTC. We believe it was in the best interests of all our stakeholders to resolve this matter so we can dedicate our full attention to selling the highest quality foods available in our inviting store environments,” said John Mackey, Whole Foods CEO and co-founder. “It will be business as usual in the 13 operating stores to be marketed for sale. We are committed to serving our shoppers by continuing to operate these stores in the manner our customers deserve and expect. We will be offering Team Members in stores that are sold the choice of either a guaranteed job offer in another store or an enhanced severance package.” The company will incur some cash expenses relating to legal and trustee fees which are not expected to be material. No material additional charges are expected related to the 19 closed properties, for which a lease liability reserve is already recorded, or related to the trademarks which have been fully amortized. The FTC had challenged the Company’s August 28, 2007 acquisition of Wild Oats Markets, Inc. Prior to completion of the acquisition, the FTC had filed a motion in the United States District Court for the District of Columbia seeking a preliminary injunction to enjoin the acquisition. Addresses for the 13 operating stores offered for sale and the 19 non-operating Wild Oats stores offered for sale are located in Arizona, Colorado, Connecticut, Missouri, New Mexico, Nevada, Oregon, Utah, Kentucky, Florida and Maine. SOURCE: Sustainable Food News < Prev   Next >