FTC Gives Greenlight to Amazon's Whole Foods Acquisition
NEW YORK — The Federal Trade Commission (FTC) will not seek to block Amazon's acquisition of Whole Foods Market Inc.
After looking into competition concerns, federal regulators opted not to act against the deal, reported the Associated Press.
The FTC investigated whether the takeover "substantially lessened competition" or "constituted an unfair method of competition," said Bruce Hoffman, acting director of FTC's Bureau of Competition. "Based on our investigation we have decided not to pursue this matter further."
A union representing food industry workers had asked the FTC to examine the deal, stated that it could hurt competition and prompt job cuts. Additionally, U.S. Rep. David Cicilline (D-R.I.) called for a hearing on the acquisition, arguing that the proposed merger could increase costs and decrease wages for Americans as a result of decreased competition in the marketplace, as CSNews Online reported. One shareholder also filed a lawsuit seeking to block the deal, claiming that it undervalues Whole Foods.
On Aug. 23, the same day that the FTC issued its statement, Whole Foods shareholders gave their approval to the acquisition. Prior to the deal, shareholders had been pressuring the chain to improve results and retain customers, who increasingly have other options for organic and natural foods.
Under the terms of the deal, Amazon will pay Whole Foods shareholders $42 for each share they own. This marks an 18 percent premium from its stock price the day before the acquisition was announced on June 16.