Eleven months after Austin, Texas-based Whole Foods Market announced the acquisition of Boulder, Colo.-based Wild Oats Markets, a federal appeals court overturned a lower court's ruling allowing the deal. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled to overturn the district court's decision and remand the case back to the lower courts.

The judges wrote that the district court had committed legal error in assuming market definition must depend on marginal consumers and consequently it underestimated the FTC likelihood of success on the merits" Jeffrey Schmidt, director of the Federal Trade Commission's Bureau of Competition said in a statement that he was pleased with the decision.

As of now, legal experts surmise, the ruling will not force Whole Foods to stop the integration plans or stop the merger, but if a district court forces a reversal, Whole Foods could be forced to sell some stores or take other actions. To date, Whole Foods has sold 35 of Wild Oats stores, closed 12 more and has begun converting Wild Oats stores into their own. Even so, courts have the power to order a divesture of assets or other actions to "ameliorate harm to the competition," according to Judge Janice Rogers? Brown, one of the judges in favor of the action.

Kate Lowery, spokesperson for Whole Foods said in a statement, "While the company disagrees with the reversal of the lower court decision, denying the FTC request for preliminary injunction, the decision acknowledges that neither the court nor the FTC has found the merger to be unlawful….In our view, the court of appeals decision provides a road map for Judge Friedman to once again deny the FTC request for a preliminary injunction."

Whole Foods is seeking a review by the Court of Appeals, which would add another layer of opinions. In an interview with Natural Foods Merchandiser magazine, grocery-retailing expert Kevin Coupe said he doesn't know how the two companies could possibly disentangle at this point. "What would this do to shareholders?" he asked. "The FTC is like a dog chasing a car or truck. It's not going to give up, but has no idea what it would do if it actually caught up."

Coupe's question, "What would this do to shareholders?" was partially answered. On Tuesday, July 28, shares were valued at 22.71 (WFMI NASDAQ) by Wednesday morning after the decision was widely known, share values dropped to 21.5 by noon EDT.