Introduction
Intercontinental Exchange (ICE) is progressing with its acquisition of data vendor Black Knight following the acceptance of a binding settlement by the US Federal Trade Commission (FTC). Initially, there were concerns from the FTC regarding the $11.7 billion deal between the two mortgage technology companies. The concerns included potential increases in costs, reduced innovation, and limited choices for lenders.
FTC Approval
Bureau of Competition Director Henry Liu stated that the original deal structure had the potential to diminish competition in crucial areas of the mortgage origination process, leading to elevated costs for lenders and homebuyers. To address these concerns, the FTC’s order includes structural relief measures and various tools to ensure competition in these critical markets.
Divestment and Approval
As part of the settlement, Black Knight, a constituent of the AltFi Fintech Index, and ICE will need to obtain FTC approval before repurchasing any divested assets or acquiring an interest in a loan origination system business over the next decade.
Black Knight is divesting its loan origination system Empower and its product and pricing engine Optimal Blue. These assets will be taken over by a subsidiary of Constellation Software. The acquisition will aid in preserving competition and innovation within the mortgage technology industry.
Public Comment Period
The consent agreement reached between Intercontinental Exchange, Black Knight, and the FTC will now proceed through a public comment period, allowing stakeholders and the general public to provide their input.
