FTC seeks to halt grocers’ merging

The Federal Trade Commission on Monday asked a federal judge to halt the integration of Wild Oats Markets Inc. and Whole Foods Market Inc. as part of a continuing legal battle over the 2007 deal that combined the two natural-grocery chains.

The FTC wants a U.S. District Court judge to force Whole Foods to stop any integration activities while one of multiple disputes over its acquisition of Wild Oats is handled in court.

If the judge finds the FTC has a strong enough case, the regulators say they could completely unwind the companies.

Federal regulators said in their filing that the request was “appropriate and reasonable” to preserve the assets of Wild Oats until the conclusion of the hearings. The FTC said it would not comment further on pending litigation.

Whole Foods executives called the FTC’s request “absurd” and said the process of integrating Wild Oats was done.

“They want us to put the toothpaste back in the tube,” said Lanny Davis, an attorney representing Whole Foods. “How can you halt something that is already done?”

Whole Foods Market bought Wild Oats Markets of Boulder, Colo., for $565 million. The Austin, Texas-based company then spent millions more converting Wild Oats stores into Whole Foods sites and selling off others.

But the FTC’s challenge, which began in 2007 before the acquisition closed, has left the merger in legal limbo.

The U.S. District Court will decide whether public interest demands a full-scale hearing.