Claims News Service, Nov. 26, 11:49 a.m. EST -- A complaint issued by the Federal Trade Commission (FTC) is threatening to scuttle a merger between two companies that provide electronic systems used in estimating auto collision damages.CCC Information Services, Inc., and Mitchell International, Inc., announced merger plans back on April 11, 2008. The deal, which was described as a "merger of equals," was valued at $1.4 billion. Together, CCC-Mitchell hoped to become a leading provider of information, workflow management systems, and integrated software to insurance companies and collision repair facilities. The companies estimated that, at its inception, they would have annual sales of approximately $460 million and approximately 2,000 employees.

However, a release issued on Nov. 26 by the FTC claims that the merger would obstruct competition in the market, including estimates for the cost of collision repairs, also known as "estimatics," and software systems used to value totaled vehicles, or total loss valuation (TLV) systems.

The FTC reasoned that the merger of CCC and Mitchell would harm insurers, repair shops, and car owners in the U.S. because of the reduction of competition in an already highly concentrated market, from three to two competing corporations. Audatex is the only other competitor. According to the FTC, prices would increase and innovation would decrease for consumers as a result.

Both CCC and Mitchell immediately responded by declaring their intent to appeal.

"While we are disappointed and disagree with the FTC's position, we intend to vigorously challenge the FTC in court," said Githesh Ramamurthy, CEO of CCC Information Services, Inc.

"The driving force behind the proposed merger is the many benefits and innovations it can deliver to our customers," said Alex Sun, president and CEO of Mitchell International. "Our industry is -- and will remain -- intensely competitive. This is something that continues to be one of its defining characteristics."

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