Economist Stephen Moore has urged the Federal Trade Commission (FTC) to approve the proposed merger between animal health distributors Covetrus and MWI Animal Health, stating it is an opportunity to enhance the current economic climate. Moore argues that the merger aligns with the goals of what he describes as a "golden age of American capitalism" and contrasts it with policies he attributes to the previous FTC leadership.
Under the Trump administration, Moore suggests, the economy experienced significant growth, with the S&P 500 reaching record highs and GDP projected to grow at 2.5%. He contends that the current FTC, under Chairman Andrew Ferguson, is shifting away from the approach of former Chair Lina Khan, whom he accuses of prioritizing blocking mergers over economic growth. Moore stated that Khan previously boasted about 43 mergers being abandoned during her tenure, viewing each as a "victory."
In contrast, Moore asserts that Chairman Ferguson aims to restore "certainty and clarity" to the merger review process by evaluating deals on their merits. He emphasizes that industries must evolve, and consolidation through mergers can be a necessary adaptation, preventing companies from being left behind.
The proposed Covetrus and MWI Animal Health merger, Moore argues, could lead to lower prices for veterinary practices and, consequently, for pet owners. He explained that the combination would create a company with the scale to invest more and offer more competitive pricing to veterinary clinics. This increased capacity, he believes, is crucial as distributors face pressure from large drug companies that are increasingly selling directly to veterinarians, bypassing distributors, and from major retailers like Amazon, CVS, and Chewy.
Moore characterized the merger not as an attempt by dominant firms to raise prices, but as a strategic move by two companies adapting to market dynamics and larger competitors. He concluded that approving the merger would demonstrate the FTC's commitment to fostering competition and supporting American businesses in a changing market landscape.