Whole Foods decision could boost other deals

By Megan Davies

NEW YORK (Reuters) - Upcoming deals such as Sirius Satellite Radio's (SIRI.O: Quote, Profile, Research, Stock Buzz) planned takeover of XM Satellite Radio XMSR.O could be helped by a court decision in favor of a takeover deal between two organic food retailers.

Judge Paul Friedman of the U.S. District Court for the District of Columbia on Thursday rejected a request from the Federal Trade Commission (FTC) to temporarily block Whole Foods Market Inc's (WFMI.O: Quote, Profile, Research, Stock Buzz) takeover of Wild Oats Markets Inc OATS.O -- a blow to the FTC which had argued that the combination could hurt competition in two dozen U.S. markets.

The FTC lost another round on Friday as Friedman refused to grant a stay while it appealed to a higher court for a preliminary injunction against the $565 million merger.

The decision is a "modest positive" to two other planned combinations -- Sirius' takeover of XM Satellite; and Google's (GOOG.O: Quote, Profile, Research, Stock Buzz) acquisition of digital advertising firm DoubleClick -- wrote Blair Levin, analyst at Stifel Nicolaus and former Federal Communications Commission official, in a research note published on Friday and obtained by Reuters.

It gives the companies "new legal ammo to argue for defining their relevant markets broadly, which could reduce antitrust concerns about potential anti-competitive effects", Levin wrote. "At a minimum, it gives the reviewing agencies some food for thought," he added in the note.

The Sirius/XM deal is being reviewed by the Department of Justice and the Federal CommunicaTions Commission, he wrote. The Google/DoubleClick deal is being reviewed by the FTC.

The organic foods deal has particular similarities to the planned Sirius/XM deal, lawyers said.

"If I'm XM and Sirius, I'm feeling pretty good about this decision, because it has many of the same attributes," said Mark Ostrau, co-chair of law firm Fenwick & West's antitrust group.