Nov 13 (Reuters) – The US antitrust regulator filed a lawsuit on Friday in a New York federal court to block Cencora’s $3.5 billion sale of its MWI Animal Health unit to veterinary supplier Covetrus, arguing the deal would raise costs for clinics and pet owners.
• The Federal Trade Commission said the proposed transaction would combine the two largest distributors of veterinary medicines and clinic supplies in the US, effectively wiping out head-to-head competition
• Cencora agreed in February to sell MWI to privately held Covetrus
• The lawsuit was filed in the US District Court for the Southern District of New York and is joined by attorneys general from 13 states
• The FTC said Covetrus and MWI currently engage in aggressive price competition, offering discounts and rebates to win business from independent veterinarians and large clinic chains
• Cencora and Covetrus did not immediately respond to Reuters requests for comment
• J.P. Morgan analysts said they do not expect the FTC challenge to hurt Cencora’s forecast
• The brokerage expects Cencora to push for the deal on its strategic merits, but said the company would likely “look for alternative MWI transactions” if the sale is ultimately blocked
• Cencora’s shares were up about 2% in midday trading
(Reporting by Kamal Choudhury in Bengaluru; Editing by Sahal Muhammed)
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