Key facts
- The FTC is investigating the proposed $3.5 billion merger between Cencora's MWI Animal Health and Covetrus.
- The agency has issued civil investigative demands to third parties connected to the deal.
- The review seeks information on the impact of the merger on veterinary product availability and practice-management software.
- The transaction would consolidate three major national veterinary distributors into two.
- Cencora plans to retain a 34.3% non-controlling stake in the combined company.
The U.S. Federal Trade Commission (FTC) is intensifying its review of the proposed $3.5 billion merger between Cencora's MWI Animal Health unit and Covetrus, according to reports. The antitrust agency has issued formal civil investigative demands (CIDs) to customers and rivals, signaling a substantive inquiry into the competitive impact of the deal.
The merger, announced in February, would combine two of the leading national suppliers of veterinary products, reducing the number of major distributors from three to two. The FTC's requests aim to gather details on how the transaction would affect the availability of veterinary products and practice-management software used by clinics.
Under the terms of the agreement, Cencora will receive $1.25 billion in cash, $800 million in preferred equity, and $1.45 billion in common equity, while retaining a 34.3% non-controlling stake in the combined entity. Covetrus CEO Ben Wolin has stated the deal is intended to offer more solutions and create savings across the animal health supply chain.
Antitrust attorneys suggest the consolidation could create a duopoly, with the combined entity potentially holding around 75% of the veterinary distribution market share. This concentration could reduce options for veterinary practices in negotiating prices, terms, and service levels, particularly impacting independent clinics and smaller groups.