US Federal Trade Commission, supermarket chain Whole Foods reach agreement
06 Mar 2009
The US Federal Trade Commission said on Friday it has reached a settlement with NASDAQ-listed Whole Foods Market Inc, resolving FTC charges that the acquisition of Wild Oats Markets in 2007 had violated antitrust law. The FTC said the settlement substantially restores competition that was eliminated by Whole Foods' acquisition of Wild Oats, its closest rival.
Under the settlement, Whole Foods will sell 32 premium natural and organic supermarkets and related assets, the FTC said. It is also required to divest related Wild Oats intellectual property, including unrestricted rights to the Wild Oats brand, the agency said.
"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, chairman, CEO, and co-founder of Whole Foods Market.
"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," he added.
After receiving final approval by the FTC, which is expected prior to 30 April 2009, Whole Foods expects to record a non-cash charge of approximately $19 million or less relating to the potential sale of the 13 operating stores. These stores had combined sales of approximately $31 million in the first quarter of fiscal year 2009, or approximately 1.3 per cent of the company's total sales of $2.5 billion.
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 amortised.
