FTC investigates Covetrus and MWI Animal Health merger amid concerns over market dominance

The proposed $3.5bn merger between Covetrus and MWI Animal Health faces FTC scrutiny over potential impacts on veterinary supply chain competition and rising pet care costs, raising questions about whether the deal promotes efficiency or market dominance.

The proposed $3.5bn tie-up between Covetrus and MWI Animal Health would knit together distribution, pharmacy services and practice-management software across much of the veterinary supply chain. The Federal Trade Commission’s deeper probe matters because the deal could reshape pricing power in a sector where pet owners and farmers already face rising costs and limited room to absorb them. For animal health providers, the question is whether this is efficiency or concentration with the power to squeeze competition.

Covetrus and MWI say the combination will create a broader animal health platform spanning companion and production animals, with Cencora set to receive cash, preferred equity and a 34.3% non-controlling stake in the merged business. But Reuters-style scrutiny of the transaction is increasing, and MLex reported that the FTC has issued civil investigative demands to customers and other market participants as it examines distribution, barriers to entry and competitive effects.

That focus appears to include whether the agency should treat veterinary distribution as one market or split it between companion-animal and farm-animal customers, Law360 reported.

The American Society for the Prevention of Cruelty to Animals says veterinary prices have risen sharply in recent years, while surveys cited by critics show many owners defer care because they cannot pay. The merger poses a familiar antitrust question: whether scale will improve service, or simply make the gatekeepers harder to dislodge.

"This news service is powered by an AI tool that curates and enhances the content related to animal health. The articles provided are for informational purposes only and should not be considered professional or veterinary advice. The content presented does not reflect the views or opinions of Stonehaven Analytics."