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March 6, 2009 4:40 PM

Orrick, Dechert Help Whole Foods Settle Antitrust Case with FTC

Posted by Zach Lowe

We are a little bit sad today that the battle over the $565 million merger of Whole Foods and Wild Oats Marketplace is over. The merger between the two organic grocers drew the ire of the Federal Trade Commission, which sought to block the 2007 merger from the beginning, claiming it concentrated too much of the organic food market under one umbrella. 

And thus began a long, back-and-forth battle that reached its crescendo in December, when Whole Foods added Orrick, Herrington & Sutcliffe heavyweight Lanny Davis to its roster (headed by Dechert) and initiated a public relations blitz that included a lawsuit against the FTC--believed to be the first such suit in more than 50 years. 

The suit claimed that the FTC was unfairly trying to block a merger that two federal courts approved over the agency's objections. One leading antitrust attorney (Steven Newborn of Weil, Gotshal & Manges) called the suit "laughable," and predicted Whole Foods was just delaying the inevitable divestiture of assets. 

Well, that happened today, as Whole Foods agreed to sell 12 Wild Oats stores and one of its own in order to satisfy the FTC, according the blog of the Legal Times, an Am Law Daily sibling publication. Why? In part because the fight was getting too expensive--Whole Foods had already spent about $16.5 million on legal fees and other costs by the end of 2008. Whole Foods will incur a cost of about $19 million to close the stores.

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