To avoid violating antitrust laws, Mars Inc., under a mandate from the Federal Trade Commission, will divest 12 veterinary clinics across the U.S. that provide specialty and emergency services no later than 10 business days after the company’s $9.1 billion acquisition of VCA Inc.
According to the FTC, Mars is required to divest each of the 12 clincis to one of three divestiture buyers: National Veterinary Associates, Pathway Partners Vet Management Co., and PetVet Care Centers.
If the acquisition takes place as proposed, it may lessen competition for certain specialty and emergency veterinary services in 10 U.S. areas by eliminating direct competition between Mars specialists in the area and those of VCA, according to the FTC’s complaint. Commission documents also claim that without a remedy, the acquisition would likely lead to higher prices for pet owners and lower quality in the specialty and emergency veterinary services they receive.
One clinic in the Kansas City, New York, and Phoenix areas will be divested to National Veterinary Associates; one clinic in Chicago, Corpus Christi and San Antonio; and two clinics in Seattle will be divested to Pathway. Two clinics in the Portland area and two in the greater Washington, D.C., area will be divested to PetVet.
The consent order specifies that Mars and VCA must secure all third-party consents, assignments, releases, and waivers required to permit the buyers to conduct business at the divested clinics, and provide reasonable financial incentives to key employees to continue in their positions. Also, for one year after the order takes effect, Mars is prohibited from entering into contracts with any specialty or emergency veterinarian affiliated with a divested clinic. Mars is also required for 10 years to notify the commission if it plans to acquire any additional specialty or emergency veterinary clinics in certain geographic areas.
Thomas A. Carpenter, DVM, will act as interim monitor and will oversee the divestiture process. Further details about the divestiture and the consent agreement are set forth in the analysis to aid public comment for this matter.
The Commission vote to issue the complaint and accept the proposed consent order for public comment was 2-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Sept. 29, after which the commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.