The Federal Trade Commission (FTC) has filed a lawsuit to block Covetrus from acquiring MWI Veterinary Supply for $3.5 billion.
According to the agency’s complaint, filed in the U.S. District Court for the Southern District of New York, the transaction would merge the two largest suppliers of veterinary clinic distribution and large corporate accounts in the United States. The FTC alleges that combining the entities would eliminate head-to-head competition, which the agency characterized as an “all-out price war,” and ultimately drive up costs for clinics while decreasing service quality.
The complaint notes that both distributors utilize national networks to deliver pharmaceuticals, vaccines, surgical supplies, and thousands of other products to veterinary practices. The FTC argues that structural challenges make it difficult for new competitors or fringe suppliers to break into the market, and that the merger would result in a highly concentrated environment that is presumptively unlawful under current antitrust guidelines.
Daniel Guarnera, director of the FTC’s Bureau of Competition, stated that the transaction would “reduce competition in an already concentrated market and drive up prices for veterinarians and their customers.” The lawsuit is joined by the attorneys general of Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Oregon, and Texas.