FTC requires Mars to divest 12 veterinary clinics nationwide

FTC requires Mars to divest 12 veterinary clinics nationwide

Corporation required to sell emergency, specialty practices as a condition of acquiring VCA; FTC concerned about lack of competition.
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Sep 01, 2017
By dvm360.com staff

In order to settle Federal Trade Commission (FTC) charges that Mars’ $9.1 billion acquisition of VCA would violate antitrust laws, Mars has agreed to divest 12 veterinary clinics around the United States that provide specialty and emergency services, according to a recent FTC release.

Mars is required to divest each of the 12 clinics no later than 10 business days after the acquisition is complete to one of three buyers: National Veterinary Associates, Pathway Partners Vet Management Co. and PetVet Care Centers, the release states.

According to the FTC’s complaint, if Mars’ acquisition of VCA takes place as proposed, it may substantially lessen competition for certain specialty and emergency veterinary services in 10 United States localities by eliminating head-to-head competition between Mars specialists in the area and those of VCA.

The complaint continues that the acquisition would likely lead to higher prices for pet owners and lower quality in the specialty and emergency veterinary services they receive. Because launching a specialty or emergency clinic presents some unique challenges, including the need to recruit specialist veterinarians with more training than general practice veterinarians, the FTC does not anticipate that its concerns about anticompetitive effects would be alleviated by new practices starting in target areas.

Here are the veterinary clinics to be divested and their buyers, according to the FTC:

> One clinic each in the Kansas City, New York and Phoenix areas will be divested to National Veterinary Associates.

> One clinic each in Chicago, Corpus Christi and San Antonio, and two clinics in Seattle will be divested to Pathway.

> Two clinics serving the Portland area and two clinics in the greater Washington, D.C., area will be divested to PetVet.

According to the release, 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 under the terms of the consent order. They must also provide reasonable financial incentives to key employees to continue in their positions.

Along with this, Mars is prohibited from entering into contracts with any specialty or emergency veterinarian affiliated with a divested clinic for a year after the order takes effect, the release states. Mars is also required for 10 years to notify the FTC if it plans to acquire any additional specialty or emergency veterinary clinics in certain geographic areas. 

Thomas A. Carpenter, DVM, has been approved by the FTC as interim monitor to oversee the divestiture process, the FTC says. More information about the divestiture and consent agreement can be found here.

The commission’s vote to issue the complaint and accept the proposed consent order for public comment was two to zero, according to the release. 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 Sept. 1 and will continue through Sept. 29. After that, the FTC will decide whether to make the proposed consent order final.

Comments can be filed electronically here or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice once it’s published.