FNF Bid To Acquire LPS Clears Another Hurdle

Posted by Patrick Barnard on December 26, 2013 No Comments
Categories : Residential Mortgage

Fidelity National Financial Inc.'s (FNF) bid to acquire Lender Processing Services Inc. (LPS) cleared a major hurdle on Tuesday, when the deal won approval from U.S. antitrust regulators.

The Federal Trade Commission (FTC) cleared the estimated $2.9 billion deal on the condition that FNF sell a copy of databases serving six Oregon counties to preserve competition, Bloomberg News reports.

FNF, which announced its intention to buy LPS in May, has hired JPMorgan Chase & Co. to review possible divestitures as it narrows its focus to the housing market, according to the report.

The FTC had originally objected to the merger, saying that the proposed combination of FNF's and LPS' title plant assets in six Oregon counties, including the Portland area, would substantially reduce competition, thus violating U.S. antitrust laws.

Oregon law requires title insurers to own an interest in a title plant in each county in which they issue policies. This requirement, however, creates a barrier to entry for new firms seeking to provide title insurance underwriting.

The FTC had argued that FNF's purchase of LPS would eliminate one of only a few available title plants in six Oregon counties, thus making it possible for FNF and one other underwriter to exclude competing firms from having an interest in a joint title plant in the Portland area.

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