of Federal Trade Commission (FTC) was sued Thursday to block a proposed $13 billion merger. Intercontinental Exchange Co., Ltd. Rival mortgage software company Black Knight.
The merger will give ICE and Black Knight a significant position in the loan origination software market, allowing them to direct customers to other mortgage services and products rather than those of competitors, the agency argued. . He also argued that the merger would stifle innovation and reduce lenders’ options for loan origination and mortgage servicing.
The FTC voted 4-0 to file a complaint in the agency’s internal court.
“For many Americans, buying a home is a key investment in building financial security. “The FTC will step in when an illegal merger risks undermining competition in such an important market.”
The widely anticipated move sets the specter of legal challenges between Atlanta-based ICE and the federal government.
“ICE has complete confidence in our position and looks forward to presenting it in court,” the company said in a statement Thursday. We continue to work toward closing the acquisition, which is expected to close in the third or fourth quarter of this year.”
ICE and Black Knight announced this week that they have agreed to sell Black Knight’s LOS, Empower, to a Canadian software company. constellation software, however, the transaction is conditional on the progress of the merger. The companies also amended the terms of the deal to lower Black Knight’s valuation to his $11.8 billion. This is approximately 11% lower than the valuation at the time the deal was announced last year.
Empower has a market share of around 10-15%, well behind ICE’s Encompass LOS, which is estimated to have a market share of around 40-45%.
Regarding the proposed sale of Empower, the FTC said it “does not address the anti-competitive impact of PPE software on the market and does not replace the intense competition between ICE and Black Knight in the LOS market.” .
ICE is the owner of new york stock exchange We have diversified our business through housing loans.
ICE Mortgage Technology President Tim Bowler said in a statement: “We are disappointed that the FTC has filed a lawsuit to block ICE’s acquisition of Black Knight.” We can deliver an end-to-end solution that benefits aspiring and current homeowners across the United States.”
Scott Olson, Community Home Lenders AssociationA trade group of small mortgage lenders has backed the FTC’s lawsuit.
“CHLA strongly commends the FTC for taking legal action to block ICE’s purchase of Black Knight. It confirms what we’ve been saying all along: ‘Connect,'” he said. in a statement.