California Joins Challenge to $3.5 Billion Veterinary Supply Merger: What Independent Clinics Should Know

The government alleges that Covetrus and MWI compete directly to supply veterinary practices with pharmaceuticals, vaccines, and equipment, including through price matching, volume-based rebates, and service contract negotiations. ³

According to the New York Attorney General, the coalition alleges the merger would substantially reduce competition among distributors to veterinary clinics generally and among distributors to large corporate practice groups specifically. New York describes those groups as preferring one distributor that can serve all their locations. ⁵

The government predicts that eliminating one of the main suppliers could lead to higher prices, less favorable contract terms, reduced investment in service, and fewer alternatives during shortages. California contends that smaller regional and specialty distributors cannot meaningfully constrain the combined company. ^{3 5}

The New York Attorney General describes the coalition as alleging that Covetrus would control more than half of the veterinary clinic distribution market nationwide. That is the government’s description of a specific distribution market, not a proven share of all veterinary products or pet care. ⁵

In a November 13 statement distributed through PR Newswire, Covetrus said the government relies on a narrow and outdated view of the market. It said clinics can buy from manufacturers, national and regional distributors, and online veterinary marketplaces, and that clinics switch suppliers regularly. Covetrus also said the combination would improve efficiency and lower the cost of serving practices, and that it will defend the transaction in court. ⁴

These are the company’s arguments. They are not established efficiencies or guaranteed customer savings, and the court has not resolved them.

Section 7 of the Clayton Act, 15 U.S.C. § 18, prohibits acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly” in any line of commerce in any section of the country. ⁶

Because the statute addresses likely effects, the government need not wait for a completed merger or an actual price increase before challenging a proposed acquisition. It must still prove its case.

The definition of the relevant market and the alternatives available to customers often matter a great deal. That is why the parties’ competing descriptions of how clinics buy supplies are central here. Size, a particular market share, or the acquisition of a competitor does not by itself establish illegality.

Whatever the outcome, a clinic may find it useful to understand its current purchasing commitments. Practical questions include:

These are general review questions; they do not suggest that either company’s customer contracts contain any particular term.

The government lawsuit does not itself entitle any clinic to compensation or permit a clinic to disregard an existing contract. Any contractual remedy or private claim requires its own legal and factual basis. For a related discussion, see our Insight on contract termination after a breach.

According to the New York Attorney General’s November 13 announcement, the companies agreed to a temporary restraining order preventing completion before December 4, 2026, and the coalition is seeking a preliminary injunction and ultimately a ruling that the merger is illegal. ⁵

That date does not mean the merger is permanently blocked or that completion is automatically authorized afterward. The FTC’s case page tracks the proceeding. ²

Mahrouyan Law’s Small Business & Commercial Litigation practice addresses supply-agreement and other commercial disputes.