A U.S. judge denied a bid by federal antitrust authorities to temporarily block organic grocer Whole Foods Market's acquisition of rival Wild Oats Markets.
Wild Oats shares soared 20 percent in late electronic trading Thursday, while Whole Foods jumped 6 percent.
U.S. District Judge Paul Friedman rejected a request by the Federal Trade Commission for a preliminary injunction against the deal.
The FTC could appeal the judge's decision or press on and bring its case against the deal to a full trial. However, the companies will be free to consummate the $565 million deal in the meantime.
"For the reasons set forth in the court's 93-page opinion issued this same day under seal, it is hereby ordered that plaintiff Federal Trade Commission's motion for a preliminary injunction is denied," Friedman wrote in a brief order.
The order said lawyers for the two sides would meet within two business days to discuss redactions needed in the judge's opinion to "protect confidential information."
Neither organic chain is a major player in the U.S. grocery industry. Whole Foods is based in Austin, Texas and operates 197 stores in the United States and United Kingdom.
Wild Oats, based in Boulder, Colo., has 110 in the United States and Canada.