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The Austin American-Statesman reports that a reading of the 93-page ruling by federal Judge Paul L. Friedman seems to clearly lay out why he ruled against the Federal Trade Commission (FTC), which has been trying to block Whole Foods’ proposed $565 million acquisition of Wild Oats.

However, the FTC continues to argue against the deal, and said yesterday that Friedman ignored "clear and authoritative" statements by Whole Foods CEO John Mackey that the only reason to buy Wild Oats was to eliminate competition and avoid price wars

The FTC has been arguing that Whole Foods and Wild Oats dominate a unique natural/organic industry, as opposed to being part of the broader supermarket industry; the FTC also says that the deal would be anti-competitive and could lead to higher prices for consumers.

"The evidence shows that Whole Foods and Wild Oats do not uniquely compete with each other, but with all supermarkets in areas where both Whole Foods and Wild Oats operates," Friedman wrote, according to the paper, which also notes that Friedman made the following observations:

• Wild Oats prices are actually higher than those at Whole Foods.

• Whole Foods prices do not vary depending on whether there is a Wild Oats store nearby.

• When Whole Foods enters a market, its customers mainly come from traditional supermarkets.

• Major supermarket chains are re-tooling themselves to compete with Whole Foods, offering more organic products.

The US District Court of Appeals in the District of Columbia has put a temporary hold on the deal, but said that the move was only to give it more time to consider the FTC arguments against the deal. The three-judge panel said that the hold "should not be construed in any way as a ruling on the merits" of the case.
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