CCC Information Services Inc. and Mitchell International, Inc. have called off a planned merger after a federal judge granted a Federal Trade Commission (FTC) request for a preliminary injunction.
Chicago-based CCC and San Diego-based Mitchell International both provide information and technology solutions to the insurance claims and automotive repair industries.
The FTC said that on Nov. 25, 2008, it filed suit in the U.S. District Court for the District of Columbia to block the merger on the basis that the transaction "would hinder competition in the market for electronic systems used to estimate the cost of collision repairs, known as "estimatics," and the market for software systems used to value passenger vehicles that have been totaled, known as total loss valuation systems."
David P. Wales, acting director of the FTC's Bureau of Competition, said, "We brought this case because of the impressive body of evidence developed by staff demonstrating that the combination of these two competitors would substantially lessen competition, ultimately leading to higher prices and less innovation for consumers."
The injunction was granted by U.S. District Judge Rosemary Collyer on Monday. Mr. Wales said, "The court's [decision] was a triumph for consumers and reaffirms the vital role competition plays in our economy."
CCC and Mitchell International said yesterday they will no longer pursue a merger of the two companies, citing the court decision.
Githesh Ramamurthy, chairman and CEO of CCC, said, "In light of the court's decision, we have jointly decided to terminate the merger. A year ago when we announced the transaction, our stated objective was to deliver greater innovation to our customers and partners. This theme has remained a constant and will continue to be at the forefront of our efforts."
Alex Sun, president and CEO of Mitchell International, said, "Serving our customers has always been our primary focus. We have reached the point in the regulatory process in which our customers, employees and shareholders are best served by continuing as independent companies."
The companies had announced the planned merger in April 2008.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.