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e-News
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Whole Foods acquires Wild Oats in $565 million deal |
02.23.2007
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AUSTIN, Texas--Organic grocery chain Whole Foods Market, Inc. announced here on Wednesday that it will acquire direct competitor Wild Oats Market.
Whole Foods has signed a definitive merger agreement with Wild Oats, the terms of which include a cash tender offer of $18.50 per Wild Oats share, making the deal worth roughly $565 million. Under the agreement, Whole Foods will also take on Wild Oats' existing net debt, reported at the end of September to be $106 million.
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Increased competition from conventional supermarkets and big box retailers that have begun introducing both national brand and private label organics influenced the merger, according to John Mackey, chairman, chief executive and co-founder of Whole Foods. "The growth opportunity in this category has led to increased competition from many players, most of whom are not dedicated natural and organic foods supermarkets, but are considerably larger than we are," he said in a company statement.
The merger will allow Whole Foods to strengthen its position in certain markets, with all of its operating regions gaining stores, said Mackey. He noted that "three of our smallest regions--our Pacific Northwest, Rocky Mountain and Florida regions--will gain critical mass," and that Whole Foods would also gain "immediate access into a significant number of new markets."
The acquisition, which Whole Foods expects to close in April, will lead to some store closures and relocations, as well as remodels of all Wild Oats stores prior to Whole Foods re-branding.
Boulder, Colo.-based Wild Oats operates 110 stores in the U.S. and British Columbia, Canada, under the Wild Oats, Henry's Farmers Market, Sun Harvest and Capers Community Markets banners.
Whole Foods Markets currently operates 191 stores in the U.S., Canada and United Kingdom.
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Gearing up for the holidays
Recently, I interviewed Pam Danziger, retail expert and the author of Shopping: Why We Love It and How Retailers Can Create the Ultimate Customer Experience...
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