Feds: Whole Foods Sought Market Grip Through Wild Oats

The chief executive of Whole Foods Market told his board that if Whole Foods bought its leading rival, the company would "eliminate forever" the possibility that anyone else could create a nationwide competitor in the natural and organic grocery business, government lawyers say.

John Mackey also said that buying Wild Oats Markets would let Whole Foods "avoid nasty price wars" in several cities where the two compete, the lawyers wrote in a court document unsealed on Tuesday.

Federal Trade Commission lawyers reported the comments in a request this month for a temporary injunction to block Whole Foods from buying Wild Oats. A federal judge approved the request.

Whole Foods announced in February it agreed to buy smaller rival Wild Oats Markets for $18.50 a share, or about $565 million. But this month, the FTC filed a lawsuit and won a temporary restraining order to block the deal.

Whole Foods was forced Monday to extend its tender offer for Wild Oats through July 20, and another delay could be coming because a hearing in the lawsuit has been scheduled for July 31.

The dispute centers on defining Whole Foods' competition. Regulators say Whole Foods and Wild Oats are leading players in natural and organic food, but Whole Foods argues that the companies are a small part of a much larger industry because big grocery chains also sell organic food.

Government officials had publicly charged that combining the two natural-food chains could lead to higher prices, but the unsealed filing by the FTC added new details.