FTC Seeks to Drop Lawsuit Against Intercontinental Exchange’s Acquisition of Black Knight
The U.S. Federal Trade Commission (FTC) has expressed its intention to withdraw its lawsuit against the proposed $11.7 billion acquisition of data vendor Black Knight by Intercontinental Exchange (ICE). The move comes as the parties involved aim to negotiate a settlement to proceed with the deal. The FTC, along with the companies, has filed a joint request to a federal court seeking the dismissal of the lawsuit, which was scheduled to go to trial on August 14 in the U.S. District Court for the Northern District of California.
Since the announcement of the deal in May 2022, shares of Black Knight have risen by more than 12%, with a 4.5% increase on Monday, reaching $74.72. ICE’s shares also saw a 1.4% rise, trading at $115.58.
The FTC initially expressed concerns about the deal in March, citing worries that ICE’s increased power in the mortgage data market could lead to higher costs for consumers and hinder innovation. The agency had also filed a complaint before an internal administrative law judge, but it withdrew the complaint in July.
In response to the FTC’s concerns, Black Knight announced in mid-July that it would sell its Optimal Blue business for $700 million. Optimal Blue provides data and technology for pricing and trading mortgages. Additionally, Black Knight had previously stated its intention to sell its Empower loan origination system business, with Canadian business software firm Constellation Software set to acquire both divested assets.
Intercontinental Exchange has been expanding its operations beyond its core exchanges business through various acquisitions. In 2020, the company acquired mortgage technology platform Ellie Mae in an $11 billion deal. Prior to that, it purchased Simplifile in a $335 million deal.
The parties involved in the Black Knight acquisition will now work towards reaching mutually acceptable terms by August 25.
Reporting by Diane Bartz in Washington and Niket Nishant in Bengaluru; Editing by Nivedita Bhattacharjee and David Gregorio
What were the initial concerns expressed by the FTC regarding Intercontinental Exchange’s acquisition of Black Knight, and how did Black Knight respond to address those concerns?
FTC Wants to Drop Lawsuit Against Intercontinental Exchange’s Black Knight Acquisition
The U.S. Federal Trade Commission (FTC) is seeking to withdraw its lawsuit against Intercontinental Exchange’s (ICE) proposed $11.7 billion acquisition of data vendor Black Knight. The move comes as both parties strive to negotiate a settlement and move forward with the deal. They have jointly requested a federal court to dismiss the lawsuit, which was set to go to trial on August 14.
Since the announcement of the deal in May, Black Knight’s shares have risen by over 12%, including a 4.5% increase on Monday, reaching $74.72. ICE’s shares also saw a 1.4% rise, trading at $115.58.
The FTC initially expressed concerns about the acquisition in March, fearing that ICE’s increased power in the mortgage data market could result in higher costs for consumers and stifle innovation. The agency had filed a complaint before an administrative law judge, but withdrew it in July.
Responding to the FTC’s concerns, Black Knight announced in mid-July that it would sell its Optimal Blue business for $700 million. Optimal Blue offers data and technology for pricing and trading mortgages. Black Knight also intends to sell its Empower loan origination system business, with Constellation Software set to acquire both divested assets.
Intercontinental Exchange has been expanding its operations beyond exchanges through various acquisitions. In 2020, the company acquired mortgage technology platform Ellie Mae in an $11 billion deal. It also purchased Simplifile in a $335 million deal.
The parties involved in the Black Knight acquisition will now work towards reaching mutually acceptable terms by August 25.
