Amazon, Whole Foods Look to Head Off Lengthy Deal Review

By Brent Kendall Features Dow Jones Newswires

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.

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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.

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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)