FTC and 13 states sue to block Covetrus's $3.5B MWI deal

Covetrus faces a federal lawsuit from the Federal Trade Commission and 13 state attorneys general that seeks to stop its $3.5B purchase of MWI Veterinary Supply, a rival the FTC calls its closest competitor. The FTC says the two are the largest suppliers in the markets for veterinary clinic distribution and for distribution to large corporate accounts. Covetrus says clinics can now buy from manufacturers, regional distributors and online marketplaces, and that it will defend the deal in court.

The FTC filed in the U.S. District Court for the Southern District of New York, joined by the attorneys general of Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Oregon and Texas, according to the agency's announcement. The FTC's case page lists CVET Topco, Clayton, Dubilier & Rice, TPG, Covetrus, Cencora and MWI as defendants. The Commission voted 2-0 to seek a permanent injunction. The states are asking for a preliminary injunction and a ruling that the merger is illegal, New York's announcement says, and the companies have agreed to a temporary restraining order that bars them from completing the deal before December 4th, 2026.

The complaint says the merged firm would top 50%

Covetrus and MWI supply clinics with pharmaceuticals, vaccines, "white goods" such as gloves, gauze and syringes, surgical supplies and thousands of other products, according to the FTC. Their customers range from single-veterinarian practices to corporate accounts with hundreds of clinics. The complaint alleges that national networks of distribution centers let the two deliver quickly and offer discounts and rebates that smaller rivals are unable to match. Covetrus's network spans 28 distribution centers, according to an October release from the software vendor RELEX.

"These two companies are engaged in fierce head-to-head competition, and Covetrus wants to eliminate its closest competitor rather than compete for veterinary clinic customers," said Daniel Guarnera, Director of the FTC's Bureau of Competition.

The complaint names two markets, veterinary clinic distribution and distribution to large corporate accounts. It says the combination would leave both highly concentrated, which makes the deal presumptively unlawful under the FTC and Justice Department joint merger guidelines. The state coalition says Covetrus would control more than 50% of the relevant markets and singles out large corporate practice groups. New York says those groups prefer one distributor that can serve every location and typically buy 65% to 90% of their supplies from it, a volume that lets them negotiate discounts.

The complaint also describes how the rivalry works. It alleges that Covetrus answered MWI's aggressive pricing by lowering its own prices and offering rebates through its VetSuite program, and it calls years of that competition an all-out price war. It adds that the emergence of Vetcove, an online platform where veterinarians compare prices and use one distributor's offer against the other, has intensified the competition in recent years.

North Carolina Attorney General Jeff Jackson framed the case around pet owners. "This unlawful merger would raise prices for pet owners, and we're going to court to stop it," he said in North Carolina's release, which cites AVMA figures showing dog owners spent an average of nearly $600 on veterinary care in 2025 and cat owners about $530.

Both sides cite online marketplaces as evidence

Covetrus answered in a statement that the suit rests on "a narrow and outdated view of the market." It lists three alternatives for clinics. Manufacturers sell directly, and Covetrus says the companies' data shows nearly all practices buy that way. Distributors compete nationally and regionally. And online marketplaces, which Covetrus says more than 60% of U.S. practices use, let clinics compare prices and order from 40+ distributors and thousands of manufacturers. The company added that retailers now sell flea and tick treatments, pharmaceuticals and pet foods directly to pet owners.

Both sides point to online platforms. The FTC describes Vetcove as a tool that intensified the rivalry between the two distributors. Covetrus describes marketplaces as proof that clinics can switch. The FTC alleges that specialty distributors, manufacturers, retailers and other fringe suppliers do not impose a meaningful competitive constraint on veterinary clinic distributors. The suit turns on which of those descriptions of the market the court accepts.

VetSuite is part of the same picture. Covetrus reported in May that the program had passed 4,000 member practices, with $150M in cumulative member benefits and average annual savings of $30,000 per practice. The complaint treats VetSuite rebates as a response to MWI's pricing, which is the competition the FTC says the merger would end.

Covetrus is based in Portland, Maine, and has been owned by Clayton, Dubilier & Rice and TPG since a 2022 take-private. MWI is a unit of Cencora. Bloomberg's August report named Patterson as the third national distributor and Midwest Veterinary Supply as a significant regional player. Patterson put its Atlas assistant inside its NaVetor software in September.

The companies agreed not to close before December 4th

The terms announced in February value MWI at $3.5B. Cencora receives $1.25B in cash and $800M in preferred equity and keeps a 34.3% non-controlling common equity stake in the combined company. Cencora's reaffirmed fiscal 2026 guidance did not assume a close before its fiscal year ended September 30th.

Cencora's quarterly filing says it received a request for additional information and documentary materials from the FTC on May 20th, 2026, nearly six months before the suit. It also lists MWI among the businesses where Cencora has begun to explore strategic alternatives. The Underbite covered the FTC's information demands to customers and rivals in its earlier review.

For clinics, the restraining order means Covetrus and MWI remain separate companies at least through December 4th. For corporate groups with hundreds of locations, New York's announcement describes the choice between the two distributors as the source of the discounts they negotiate. The FTC is seeking a permanent injunction, the states a preliminary one, and Covetrus has said it is prepared to defend the deal in court.

Source: Federal Trade Commission