Amazon, Whole Foods Look to Head Off Lengthy Deal Review
July 21 2017 - 6:36PM
Dow Jones News
By Brent Kendall
WASHINGTON -- Amazon.com Inc. and Whole Foods Market Inc. are
giving U.S. antitrust enforcers more time to complete an early
review their planned tie-up, a strategy companies sometimes use in
a bid to head off a potentially lengthy government
investigation.
The government's initial 30-day clock for reviewing the deal
started June 23, a week after Amazon announced its plans to acquire
Whole Foods for $13.7 billion including debt. But in a corporate
filing Friday, Whole Foods said Amazon would re-file documents next
week seeking government approval on the deal, effectively
re-starting the clock and removing some of the deadline
pressure.
Companies sometimes use the tactic in the hopes that antitrust
enforcers will get comfortable enough with their transaction during
the extended initial review that they will agree to forego a longer
probe.
Many antitrust observers believe the deal doesn't raise classic
concerns about competition because a combined Amazon and Whole
Foods won't have a dominant share of the grocery market. But
advocates for strong antitrust enforcement have called for a close
review of the transaction, raising questions about what the deal
might mean for Amazon's considerable muscle online, as well as for
the future of the retail grocery industry.
Representatives for Amazon and Whole Foods didn't immediately
respond to requests for comment.
Companies are required to provide advanced notice of their
transactions to the Federal Trade Commission and the Justice
Department, which share antitrust authority, and the two agencies
have 30 days after the notice to consider whether a merger or
acquisition merits closer scrutiny. If the government does want to
take a close look, one of the agencies will make a "second request"
for information from the companies, a move that triggers a more
in-depth investigation that can take many months.
The FTC, which typically reviews grocery store deals, has taken
the reins for reviewing the Amazon-Whole Foods deal, though both
the commission and the Justice Department have been interested in
the topic of innovation and competition in the online space, where
Amazon is a leading player.
Officials with Justice Department and FTC declined comment on
the matter.
Both federal agencies remain short-staffed after the transition
between the Obama and Trump administrations. President Donald Trump
hasn't announced nominees for any of the three vacancies at the
five-member FTC. The Senate, meanwhile, has not yet confirmed Mr.
Trump's nominee to lead the Justice Department's antitrust
division, Makan Delrahim.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
July 21, 2017 18:21 ET (22:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Whole Foods Market, Inc. (NASDAQ:WFM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Whole Foods Market, Inc. (NASDAQ:WFM)
Historical Stock Chart
From Sep 2023 to Sep 2024