On Thursday, the U.S. Federal Trade Commission (FTC) announced that it had reached an agreement to allay antitrust concerns regarding the proposed acquisition of data vendor Black Knight by NYSE owner Intercontinental Exchange.
The $11.7 billion merger of the two leading mortgage technology suppliers first alarmed the FTC because it would increase costs, stifle innovation, and restrict the options available to lenders.
According to Henry Liu, head of the FTC’s Bureau of Competition, “to address these concerns, the Commission’s order provides structural relief and a variety of tools to preserve competition in these critical markets.”
President Joe Biden’s antitrust authorities in the United States have adopted a firm position against corporate consolidation, going up against businesses in a variety of sectors like aviation, technology, and finance.
According to the FTC, the proposed deal guarantees Black Knight’s sale of Empower and Optimal Blue, two companies that offer services in the mortgage origination process.
Constellation Web Solutions, a division of Constellation Software, will take over the two.
Midway through July, Black Knight announced that it will sell its Optimal Blue division for $700 million. Data and technology are provided by Optimal Blue to price and trade mortgages. The business for the Empower loan origination system had already been put up for sale.
The deal with the FTC also stipulates that over the following ten years, ICE and Black Knight must obtain permission from the regulator before repurchasing any assets that have been unloaded or before acquiring a stake in a company that provides loan origination systems.
In an effort to reach a settlement, the FTC last month attempted to withdraw the case it had first filed against the proposed merger.
The consent agreement is currently subject to public comment.