The Federal Trade Commission and 13 state attorneys general have sued to block Covetrus Inc.’s proposed $3.5 billion acquisition of MWI Veterinary Supply Inc., alleging that the transaction would combine the two largest distributors serving veterinary clinics in the United States.
The complaint, filed on 13 November in the Southern District of New York, names Covetrus, its owners Clayton, Dubilier & Rice and TPG, and MWI’s parent Cencora. It seeks permanent equitable relief preventing the deal from closing.
Veterinary distributors supply clinics with pharmaceuticals, vaccines, gloves, gauze, syringes, surgical materials and related services. The FTC alleges that Covetrus and MWI have national delivery networks and rebate structures that smaller suppliers cannot readily match.
The regulator says their rivalry intensified after clinics began using Vetcove, an online comparison platform, to test one distributor’s prices against the other. According to the complaint, MWI’s aggressive pricing prompted Covetrus to lower prices and offer rebates through its VetSuite programme.
The FTC’s theory is that the acquisition would eliminate that head-to-head pressure in two highly concentrated markets: distribution to veterinary clinics generally and distribution to large corporate accounts. It alleges that the result would be higher clinic costs, weaker service and, ultimately, higher prices for pet owners.
The Commission voted 2–0 to authorise the action. Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Oregon and Texas joined the complaint.
The allegations have not been adjudicated. The filing begins the federal case; it is not a finding that the merger is unlawful, and the defendants will have an opportunity to contest both the market definition and the predicted competitive effects.
