FTC Takes a Closer Look at Proposed Cencora-Covetrus Merger

The proposed $3.5 billion combination of Cencora's MWI Animal Health and Covetrus is facing increased scrutiny from federal regulators, a move that could have significant implications for veterinary product distribution and practice management software.

According to Bloomberg News, the U.S. Federal Trade Commission (FTC) has begun requesting information from veterinary customers and industry competitors as it reviews the proposed acquisition. The agency is evaluating whether combining two of the country's largest veterinary suppliers could reduce competition in key areas of the animal health industry.

The reported information requests focus on more than pharmaceuticals and medical supplies. Bloomberg reports that regulators are also examining how the deal could affect veterinary practice management software, including platforms used for electronic medical records, inventory management, prescriptions, billing, and payments.

Neither Cencora, Covetrus, nor the FTC immediately commented on Bloomberg's report.

More Than a Distribution Deal

The proposed transaction, valued at approximately $3.5 billion, would unite two companies that play major roles in the day-to-day operations of veterinary practices across the United States.

Earlier this year, Cencora announced plans to divest MWI Animal Health as part of a broader strategy to focus on its core pharmaceutical distribution business. Covetrus, already a leading provider of veterinary distribution, technology, and software solutions, would acquire MWI under the agreement.

If approved, the combined company would provide pharmaceuticals, vaccines, diagnostics, medical equipment, inventory services, and software solutions to thousands of veterinary hospitals serving companion animals, equine patients, and food animal practices.

Why the FTC Is Paying Attention

Veterinary practices rely heavily on distributors for far more than simply ordering medications. Many clinics use integrated platforms that connect inventory management, online ordering, prescription services, electronic medical records, payment processing, and client communication into a single workflow.

As distribution companies expand their technology offerings, regulators appear to be asking whether consolidation could reduce competition not only in product availability but also in the software systems that have become essential to running a modern veterinary hospital.

According to Bloomberg, the FTC is gathering feedback from veterinary clinics and industry stakeholders before determining whether the transaction raises antitrust concerns.

What It Could Mean for Veterinary Practices

The proposed merger has generated discussion throughout the veterinary industry because of the central role both companies play in clinic operations.

Supporters of consolidation often argue that larger organizations can improve efficiency, expand product availability, and invest more heavily in technology. Others question whether fewer national distributors could eventually affect pricing, customer service, innovation, or the number of software choices available to veterinary hospitals.

At this point, those questions remain unanswered. The FTC has not challenged the transaction or announced any enforcement action. Instead, regulators are continuing to collect information before deciding whether additional review or intervention is necessary.

For veterinarians, practice managers, and hospital owners, the outcome could influence how clinics purchase products, manage inventory, and operate their practice management systems for years to come.

Source: Bloomberg News, as reported by Reuters.