WASHINGTON (dpa-AFX) - The U.S. Federal Trade Commission or FTC announced that it has filed a lawsuit to block Covetrus Inc. and its owners, Clayton, Dubilier & Rice LLC and TPG Inc., from acquiring MWI Veterinary Supply Inc. from Cencora Inc. (COR) in a deal valued at $3.5 billion.
According to the FTC, the proposed transaction would combine the two largest distributors serving veterinary clinics and large corporate veterinary accounts in the United States. The agency argues that the merger would reduce competition, allowing the combined company to increase costs for veterinary clinics, lower service quality, and ultimately raise prices for pet owners.
The FTC's complaint alleged that Covetrus and MWI are each other's closest competitors in key veterinary distribution markets, making the acquisition potentially harmful to customers that rely on their products and services.
The Commission voted 2-0 to authorize staff to seek a permanent injunction blocking the transaction. The lawsuit was filed in the U.S. District Court for the Southern District of New York.
The FTC's action is backed by the attorneys general of Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Oregon, and Texas, who joined the complaint in an effort to stop the deal from proceeding.
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