Antitrust Law Daily Mars to divest 12 veterinary clinics to resolve FTC concerns over VCA acquisition
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Wednesday, August 30, 2017

Mars to divest 12 veterinary clinics to resolve FTC concerns over VCA acquisition

By Jeffrey May, J.D.

In order to receive FTC approval of its proposed $9.1 billion acquisition of pet care company VCA Inc., Mars, Inc. has agreed to divest 12 veterinary clinics around the country. Both parties operate clinics that provide specialty and emergency veterinary services. The divestitures are intended to remedy the loss of head-to-head competition between Mars and VCA in the provision of such services that would have resulted from the merger without the conditions (In re Mars, Inc., FTC File No. 171 0057).

Complaint. According to the FTC complaint, without the divestitures, the transaction, announced in January, would impact certain local markets by: eliminating head-to-head competition between Mars and VCA in the provision of specialty and emergency veterinary services; increasing the likelihood that Mars would unilaterally exercise market power; and increasing the likelihood that customers would be forced to pay higher prices or experience a degradation in quality for the relevant services. The complaint details the potential impact on various veterinary specialties if the divestitures were not required.

Mars is a diversified company with a well-known candy business in addition to a pet care business that includes pet food product manufacturing and the provision of veterinary services. Mars Petcare’s portfolio of veterinary services businesses includes BANFIELD Pet Hospital, BLUEPEARL, and PET PARTNERS.

Proposed FTC consent order. Under the terms of the proposed FTC consent order, Mars has agreed to divest 12 clinics no later than 10 business days after the acquisition is complete. The clinics will be sold to one of three buyers: National Veterinary Associates (NVA), Pathway Partners Vet Management Company, and PetVet Care Centers. Clinics in Kansas City, New York, and Phoenix are to be divested to NVA. Clinics in Portland, Rockville, and Vienna are to be divested to PetVet. Clinics in Chicago, Corpus Christi, San Antonio, and Seattle are to be divested to Pathway, the agency announced. The divestitures will preserve competition between the divested clinics and Mars’ BluePearl or VCA’s clinics, it was noted.

Companies: Mars, Inc.; VCA Inc.

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