The U.S. Federal Trade Commission has filed a lawsuit to block the proposed acquisition of Boulder-based Wild Oats markets Inc. by rival Whole Foods Market Inc.
Austin, Texas-based Whole Foods announced in February that it planned to buy Wild Oats for roughly $700 million. The two companies are the largest players in the natural-grocery sector.
Whole Foods operates 194 stores. Wild Oats has 110 locations.
“Whole Foods and Wild Oats are each other’s closest competitors in premium natural and organic supermarkets, and are engaged in intense head-to-head competition in markets across the country,” Jeffrey Schmidt, director of the FTC’s Bureau of Competition, said in a press release. “If Whole Foods is allowed to devour Wild Oats, it will mean higher prices, reduced quality, and fewer choices for consumers. That is a deal consumers should not be required to swallow.”
Wild Oats and Whole Foods said they would “vigorously challenge” the lawsuit.
“We continue to believe very strongly that this merger is in the best interest of all our constituents,” Wild Oats chairman and chief executive Greg Mays said in a press release.
In a separate statement, Whole Foods chairman and CEO John Mackey said the FTC is basing its decision on its assessment of the natural-foods marketplace rather than considering the entire supermarket sector.
“The FTC has failed to recognize the robust competition in the supermarket industry, which has grown more intense as competitors increase their offerings of natural, organic and fresh products, renovate their stores and open stores with new banners and formats resembling Whole Foods Market,” he said.
