How did the FTC lose this one? How?
First, bringing the suit to stop the Whole Foods Market (WFMI) and Wild Oats Markets (OATS) merger on "anti-trust" grounds was moronic especially when you consider the #1 "organic food" seller in the US after the merger is complete will not be the combined entity, but will still be Wal-Mart (NYSE:WMT). But, they filed it anyway so let's go from there.
Then we had Whole Foods CEO John Mackey in what can only be described as an acid induced rant saying in an email to his board that the merger would help Whole Foods eliminate "almost forever" the threat that a rival could enter the organic space. He then went on to say the merger would allow for Whole Foods increase prices to customers and pressure suppliers (local farms) to lower costs. The email went even further to say that buying Wild Oats would help the company avoid "nasty price wars" in a number of markets and the deal would help deter a big chain such as Kroger from creating a competing natural-foods powerhouse.
Then, as if that was not enough - Mackey decided to join a Yahoo message board and continue the rants. He trashed Wild Oats in an attempt to lower its share price before the merger was announced. The posts are currently under investigation by the SEC and I would be surprised if he was not formally admonished for them.
In short, we have the CEO of a company in internal emails saying a proposed merger would help them raise consumer prices, pressure suppliers and eliminate potential competition. Isn't that exactly what the FTC had to prove? How could they lose this one? To top it off, the FTC itself is currently under investigation because internal documents they released that should have had redacted information about Whole Foods "trade secrets" turn out to be, well, not redacted.
Not only will the FTC lose a case that Mackey handed them on a silver platter, but they will end up getting sued and lose again in the process.
Whoever lead the charge on this one should be encouraged "to pursue other opportunities."