Takeover of eight vet businesses could increase costs for animal owners

The Competition and Markets Authority (CMA) opened initial phase 1 investigations into IVC’s takeover of eight independent vets businesses in December last year. IVC is the largest provider of veterinary services in the UK, with over 1,000 veterinary practices providing small animal, equine and farm animal veterinary services such as surgeries, vaccinations, and microchipping.

As with other recent CMA merger investigations in the veterinary sector, the deals take place against a backdrop of a small number of corporate groups, including IVC, buying up large numbers of independent practices and local chains of vets across the UK.

The deals that give rise to today’s findings were completed between September 2021 and March 2022. IVC chose not to notify the CMA about these deals and they were not publicised at large at that time. The CMA subsequently identified potential concerns as part of its ongoing monitoring of mergers and acquisitions and opened initial investigations in December 2022.

Following these investigations, the CMA found competition concerns in the supply of veterinary services for small animals (typically household pets) in 23 local areas across Essex, Kent, Suffolk, Norfolk, Anglesey and South Wales. Concerns were also found in relation to the supply of out-of-hours emergency care for small animals in local areas in Norfolk and Suffolk and in the supply of equine veterinary services in local areas in Berkshire, Buckinghamshire, Bedfordshire and Oxfordshire.

The CMA’s investigation found that the combined businesses would account for a significant proportion of these veterinary services in each local area of concern. While IVC previously competed with the independent businesses that it has acquired at each of these locations, the CMA is concerned that it would not face sufficient competition after the mergers. This could lead to pet and other animal owners facing higher prices or a worse quality of service, including more limited treatment options or reduced opening hours.

Colin Raftery, Senior Director of Mergers, at the CMA, said:

The CMA continues to receive complaints about higher prices or lower quality services as a result of too many vets’ practices in the same area being under the control of a single company.

As a small number of large players continue to buy up independent practices and chains across the UK, we’re continuing to closely monitor their activities so that we can take action to ensure that customers in areas where vets are acquired aren’t left facing a lack of competition.

As living costs continue to rise and budgets are stretched even further, it’s particularly important that households across the UK shouldn’t be paying over the odds to get the right quality of treatment for their pets.

IVC has 5 working days to offer legally binding proposals to the CMA to address the competition concerns identified. The CMA would then have a further 5 working days to consider whether to accept these instead of referring the cases to Phase 2 investigation(s).

For more information, visit the IVC case page.

Notes to editors:

1. Recent reports indicate that there are 17 million pet-owning homes across the UK, with consumer expenditure on vets and other services for pets in the UK estimated to be around £4 billion between July 2020 and June 2021. In recent years, the ownership of vets’ practices across the UK has changed, with many practices being acquired by a small number of corporate groups, such as IVC. While independent veterinary practices accounted for 89% of the UK industry in 2013, this share had fallen to less than half (45%) by 2021, primarily as a result of independent practices being bought by corporate groups.

2. IVC refers to Independent Vetcare Limited. IVC is a large global veterinary care provider. Shareholders in IVC include EQT Private Equity, Nestlé, Berkshire Partners, and Silver Lake.

3. The eight independent vets businesses acquired by IVC were Penrose Veterinary Group Limited, Kevin Castle (Pet Care) Ltd, Swayne & Partners Topco Ltd (including Swayne and Partners Limited), Treforest Vets (Holdings) Limited (including Treforest Veterinary Clinic Limited), Mercer & Hughes Limited, Swaffham Veterinary Centre Ltd, Anglesey Pet Clinic Ltd and Chiltern Equine Clinic (including Chiltern Veterinary Services Limited & Chiltern Bury Farm Limited).

4. All 8 practices are veterinary businesses. Some of these practices operate multiple sites, and the CMA’s investigation concerned a total of 19 sites and identified a loss of competition in relation to 15 of them. All are small animal veterinary practices (except for Chiltern which is an equine veterinary practice). Some of the targets also provide ‘in-house’ out-of-hours emergency veterinary services.

5. The 8 transactions are separate mergers, although the CMA has conducted its investigations into all of these transactions in parallel. Each of the 8 transactions were completed between 16 September 2021 and 22 March 2022. The CMA found that the transactions were not made sufficiently public at the time of completion and began its investigation once material facts about the transactions were made available to the CMA (in response to questions sent to IVC by the CMA) in August 2022.

6. The UK merger control regime is voluntary, which means that merging businesses are free to choose whether to notify a merger to the CMA. The fact that a merger has not been voluntarily notified to the CMA does not mean that the CMA will not review it. The CMA has a duty to track merger activity to determine whether any unnotified merger may give rise to a substantial lessening of competition. The CMA’s Mergers Intelligence Committee, which keeps merger activity under review, decided to call in these mergers for review after it became aware, in August 2022, that IVC acquired the eight independent vets businesses listed above between September 2021 and March 2022.

7. The CMA served initial enforcement orders in November 2022 requiring each of the companies to operate independently, as they did before the purchase. The orders remain in force. Details of the orders can be found on the IVC/ multiple independent veterinary businesses merger inquiries page.

8. This is the third recent merger involving veterinary practices in which the CMA has identified competition concerns. The CMA found competition concerns following VetPartners’ purchase of Goddard Veterinary Group in April 2022, and following CVS’s purchase of The Vet in February 2022. In both cases, the purchasers agreed to sell practices in order to remedy the concerns identified by the CMA.

9. Today’s findings on these eight acquisitions by IVC comes prior to the start of a separate phase 1 investigation into 17 acquisitions by Medivet.

10. All media enquiries should be directed to the CMA press office by email on [email protected], or by phone on 020 3738 6460.

11. For media enquiries, contact the CMA press office on 020 3738 6460 or [email protected].

12. All enquiries from the general public should be directed to the CMA’s General Enquiries team on [email protected] or 020 3738 6000.