Merger of whole food market and wild oats

A merger between two major food retailers, Whole Food Market and Wild Oats, is the subject of the case study that was supplied. John Mackey, who later rose to the position of company CEO, and his girlfriend Renee Lawson founded the former. Renee Lawson was the core founder and held a 50% stake in the company. The establishment method of buying numerous small-scale establishments worked well, and the company was able to spread through several states at once. Their success was credited to an original company plan as well as supplementary elements like satisfying customer service. The growth produced an average yearly growth rate of 31% and net revenues of more than 5.6 billion dollars.
Wild Oats. The former was established by two individuals John Mackey, who later became the business’ CEO and his girlfriend Renee Lawson who served as the core founder with 50% equity in the firm. The establishment strategy of acquiring many small-scale stores proved successful, and the business itself was able to expand through various states at a go. Their success was attributed to a unique business strategy and other extras such as a fulfilling customer service. The expansion led to an average growth rate of 31% annually and a net revenue of over 5.6 billion dollars.

Wild Oats served to be WFM’s major competitor. It was founded by a Gilland and Elizabeth Cook in the year 1987. It began as a health food store dubbed crystal market then later was renamed to Wild Oats. The outlet’s mission was greatly similar to that of WFM since they too wanted a healthy distribution of organic products to its customers. In times of size and revenue, WFM greatly outshined Wild oats with the latter generating a mere $457 per square foot compared to the former’s $900 per sq ft.

The merger deal was hence proposed which involved WFM ultimately acquiring Wild Oats for an estimated cost of $700 million. This was inclusive of the debts grossing over $106 million which Wild Oats had collectively acquired over the years. The merger deal would allow WFM to actively expand to other states including North Pacific among various other benefits. The Federal Trade Commission was however against the merger agreement. They saw that a merger between two of the most renowned food distributors would create a monopoly rendering the other companies in light of Earth Fare and New seasons entirely market less. WFM and Wild Oats responded by declaring that they are not the major food distribution entities and showcased the existence of smaller ones especially supermarkets such as Walmart which distributes whole food among other products. The FTC would not hear of this, and it filed a lawsuit preventing the merger. The case waits to be decided.









































References

University of Virginia (2008) “Whole Foods Market and Wild Oats Merger.” Darden Business Publishing