A merger involving a prominent provider of mortgage industry data has been given the government’s blessing now that the acquiring party has agreed to divest assets.
Fidelity National Financial Inc. previously disclosed that it agreed on May 28 to acquire Lenders Processing Services Inc. The amount of the transaction is proposed at $2.9 billion.
But the deal was held up by the Federal Trade Commission, which charged that Fidelity’s acquisition of Jacksonville, Fla.-based LPS in several local Oregon markets would violate antitrust laws..
According to the FTC, combining the firms’ title plant assets in the Oregon markets would substantially lessen competition.
“The proposed acquisition would eliminate one of only a few available title plants in six Oregon counties, and make it possible for Fidelity and only one other underwriter to exclude competing firms from having an interest in a joint title plant in the Portland metropolitan area,” the FTC news release said.
The commission alleges that Fidelity’s acquisition would likely increase the risk of anticompetitive coordination between title plant owners in the markets.
On Tuesday, the FTC announced that Jacksonville-based Fidelity agreed to settle the charges.
A copy of LPS’ title plants in six Oregon counties will be sold by Fidelity, according to the agreement.
In addition, an ownership interest equivalent to LPS’ share of a jointly owned title plant in the Portland area will be divested.
The FTC says that the proposed order will restore competition likely to be lost through the merger without interfering with merger-related efficiencies.
“These divestitures are designed to counteract the likely anticompetitive effects of the transaction, while preserving any efficiencies that might arise from the combination of Fidelity and LPS,” the FTC stated.
The order additionally requires Fidelity to notify the FTC before acquiring any title plants in Oregon in certain circumstances that might raise anticompetitive concerns. Fidelity is also required to maintain title plant assets until the divestitures are complete.
