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AUSTIN, Texas -- Whole Foods Market, the leading natural organic supermarket chain, agreed to buy its natural food competitor, Boulder, Colo.-based Wild Oats Markets, for $18.50 per share, an 18 percent premium over the average share price last month, totaling $565 million.
"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," Whole Foods chairman and CEO John Mackey said in a written statement.
Whole Foods will also assume $106 million in existing net debt, bringing the total price to nearly $700 million, reported Progressive Grocer, sister publication to Convenience Store News. The merger raises Whole Foods' nearly 200 store presence in all 11 of its regions, and allows it to reach critical mass in three, the report stated.
"We think we are going to have a very positive impact on Wild Oats, and we think they will have a positive impact on Whole Foods," said Mackey. "We need each other."
There is no word on the future of Wild Oats 110 stores under four operating banners. However, a New York Times report stated that Mackey said the companies would save money by eliminating corporate duplication.
"Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members," he added.