(Aug. 17) Whole Foods Markets Inc. has been given the green light to buy rival Wild Oats.
U.S. District Judge Paul Friedman ruled Aug. 16 against the Federal Trade Commissionâs request to block the $565 million merger, ending a three-month dispute between it and the Austin, Texas-based retailer.
Judge Friedman declined to release an explanation for his decision, saying it contained confidential information.
That comes two days after the FTC accidentally released sealed court documents containing Whole Foods trade secrets.
The leaked information included, according to news reports:
Whole Foods plans to close 30 or more Wild Oats stores;
A Whole Foods store opening cuts revenues at a nearby Wild Oats store by nearly 30%;
Whole Foods bars its suppliers from directly selling to Wal-Mart because going through distributors raises its costs; and
That buying Wild Oats and shutting down certain stores would increase revenue by 85% to 90% at nearby Whole Foods stores.
The Austin, Texas-based retailer issued a statement late Aug. 14 after the informationâs release, which the FTC reportedly said was accidental.
âUntil the merger is complete, Whole Foods will not have sufficient information, including store-level financial statements, to make any final decisions regarding future operations,â the statement said.
Some of the information leaked revealed no surprises, said retail analyst David Livingston of DJL Research, Pewaukee, Wis. Closing 30 or more stores is normal in an acquisition of this size, Livingston said, as is the estimate that a new Whole Foods store cuts nearby Wild Oats storesâ revenues.
However, the implication that shutting down Wild Oats stores would increase Whole Foodsâ revenue by 85% to 90% is unreasonable, he said.
âThat is outrageous, since a Whole Foods store typically does more than twice the volume of a Wild Oats store,â he said.