The US Federal Trade Commission (FTC) said that its staff has requested a federal court to grant a temporary restraining order (TRO) and preliminary injunction (PI) to block Intercontinental Exchange’s (ICE) previously announced $13.1bn acquisition of Black Knight.
According to the agency, the TRO and PI would help it to block the closing of the proposed merger and enable it to proceed with an administrative trial.
In its administrative complaint, the FTC alleged that the merger of two large providers of home mortgage loan origination systems and other important lender software tools would increase costs.
Besides, the proposed deal would reduce innovation and lenders’ choices for tools required to generate and service mortgages, said FTC.
The agency added that apart from harming the market for loan origination systems, the transaction would also affect competition for product pricing and eligibility engines (PPEs). Besides, it will impact other various ancillary services that come as add-ons to loan origination software.
If the deal is finalised, it will remove competition for PPEs between the merging parties and will boost ICE’s ability and incentive to use control of its loan origination system to undermine competition to affect competing PPEs and other add on providers, said the FTC.
The petition for a TRO and PI was submitted in the US District Court for the Northern District of California.
The FTC stated: “ICE and Black Knight have stipulated to a TRO enjoining ICE and Black Knight from consummating the proposed acquisition until after 11:59 PM Eastern Time on the second business day after a U.S. District Court rules on the FTC’s motion for a preliminary injunction pursuant to Section 13(b) of the Federal Trade Commission Act, or the date set by the District Court, whichever is later.”
ICE announced the cash and stock deal with the Florida-based mortgage software company in May 2022.
ICE, the parent company of the New York Stock Exchange (NYSE), would pay Black Knight’s shareholders $85 per share, of which 80% will be in cash, and 20% will be in the form of stock. This includes $10.5bn in cash and approximately $2.6bn worth shares of ICE.
