FTC sues to block Cencora’s $3.5 billion veterinary-unit sale to Covetrus

The Federal Trade Commission, the US regulator that enforces competition rules, filed a lawsuit in a New York federal court on November 13 seeking to block Cencora’s $3.5 billion sale of MWI Animal Health to veterinary supplier Covetrus.^[1]

The FTC argues that the deal would raise costs for veterinary clinics and pet owners; the case is at the stage of asking a court to stop the transaction.^[1]

The lawsuit adds uncertainty over whether and when Cencora can receive the sale proceeds and Covetrus can take over the business.^[1]

The FTC’s competition concern runs through clinics’ purchasing costs: combining suppliers could raise those costs, leaving clinics to absorb lower margins or pass some of the increase to pet owners through higher fees. That remains the regulator’s risk case, conditional on the deal proceeding and subsequent pricing.^[1]

Impact

• Veterinary-supply distributionRisk

  Covetrus faces a legal obstacle to expanding through the acquisition. Rival suppliers also face uncertainty over whether they will compete against the combined business.^[1]

• Veterinary clinics and pet careNeutral

  Clinics buy from these suppliers. If the cost increases alleged by the FTC materialize, clinics would face a choice between protecting margins and raising fees; blocking the deal could avert that risk.^[1]