On August 30, 2017, the Federal Trade Commission (“FTC”) announced that Mars, Incorporated (“Mars”) agreed to divest 12 specialty or off-hours emergency animal hospitals around the United States to settle FTC allegations that Mars’s $9.1 billion acquisition of pet care company VCA Inc. (“VCA”) would violate federal antitrust laws.
The animal hospital industry is highly fragmented and very crowded. For the most part, the FTC found that there were really very few antitrust concerns with the deal so there was much in terms loss of competition. Overall, the combined entity would own roughly 6.5% of the North American market (26,000 animal hospitals) in terms of locations. While a 6% share of the national or North American space is by no means troubling, problematic overlaps could nevertheless exist in smaller local markets. Indeed, the primary factors influencing a customer’s selection of an animal hospital are convenient location and hours, personal recommendations, reasonable fees and quality of care.