FTC Sues to Block $3.5 Billion Covetrus Deal for MWI

The Federal Trade Commission sued on Friday to block Covetrus from buying MWI Animal Health, the veterinary supply business Cencora agreed to sell in February in a deal valued at $3.5 billion. The complaint, filed in the U.S. District Court for the Southern District of New York, asks the court for a permanent injunction that would stop the acquisition outright.

The agency's argument is about concentration. Covetrus and MWI are the two largest distributors of veterinary medicines and clinic supplies in the United States, and the FTC says combining them would wipe out the head-to-head competition that now keeps prices in check for the clinics that buy from both.

Thirteen state attorneys general joined the federal complaint: Arizona, Arkansas, California, Colorado, Maine, Michigan, Minnesota, Nebraska, New York, North Carolina, Ohio, Oregon and Texas. The commission voted 2-0 to authorize its staff to seek the injunction, so the case arrives in court with both the federal regulator and a bloc of states behind it.

The FTC says the rivalry it's trying to protect is concrete, not theoretical. Covetrus and MWI compete aggressively on price today, offering discounts and rebates to win business from independent veterinarians and large clinic chains alike. Remove one of the two, the complaint argues, and those discounts are the first thing that disappears — with clinics passing higher supply costs on to pet owners.

Covetrus is privately held, owned by the private equity firms Clayton, Dubilier & Rice and TPG, and it's pushing back on the framing. The company responded the same day that the FTC's case relies on a narrow and outdated view of the market. Cencora, which announced the sale in February and had not assumed a close before its fiscal year ended in September, didn't immediately comment on the lawsuit itself.

Investors, for now, aren't pricing in a disaster for the seller. Cencora's shares were up about 2 percent in midday trading on Friday, after the suit was filed. J.P. Morgan analysts said they don't expect the FTC challenge to hurt Cencora's forecast, and they expect the company to argue the deal on its strategic merits.

That same analysis names the fallback. If the sale is ultimately blocked, Cencora would likely look for alternative transactions for MWI rather than simply keeping a business it has already decided to exit. A blocked deal, in other words, probably starts a second sale process instead of ending the story.

The deal the FTC is trying to unwind was structured as a merger, not a simple cash sale. Under the February agreement, Cencora would receive $1.25 billion in cash, $800 million in preferred units and $1.45 billion in common units — roughly 34.3 percent of the combined company — for a business valued at $3.5 billion. Cencora wouldn't be leaving animal health entirely; it would be swapping sole ownership of MWI for a large minority stake in the merged distributor.

Reporting before Friday's filing suggested the companies saw this coming and tried to head it off. MLex reported in October that remedies offered to the FTC and the states had not satisfied regulators, which is usually the last stop before a complaint. The February agreement also didn't assume a quick close — Cencora said at the time that its fiscal 2026 outlook didn't count on the deal finishing before its year ended in September, a hedge that now reads less like caution and more like foresight.

Distribution is the part of veterinary medicine nobody sees, which is why this case matters beyond the two companies named in it. Clinics don't buy most medicines and supplies from manufacturers directly; they buy through distributors, and the distributor's discount schedule shapes what an independent practice can charge and still survive. Two national distributors bidding against each other is a thin layer of competition, but the FTC's complaint treats it as the load-bearing one — the difference between a clinic that can negotiate and a clinic that takes the price it's given.

What happens next is a court's calendar, not a closing date. The Southern District of New York will decide whether the two biggest names in veterinary distribution can become one company, and every independent clinic that negotiates its supply contract this year has a stake in the answer. The discounts the FTC describes exist because two distributors are bidding. The lawsuit is, at bottom, an attempt to keep it that way.