Closing arguments in the Federal Trade Commission’s (FTC) request to put the $1.4-billion merger of CCC Information Services and Mitchell International on hold will be heard in U.S. District Court for the District of Columbia on Feb. 17.
The FTC filed a request with the federal court for a preliminary injunction against the merger in November 2008, charging that it would hinder competition in the market for electronic systems used to estimate the cost of collision repairs and the market for software systems used to value passenger vehicles that have been totaled, known as total loss valuation (TLV) systems.
The FTC alleged that the merger would harm insurers, body shops and ultimately, U.S. car owners by reducing from three to two the number of competitors in the two related businesses.
After the FTC filed its preliminary injunction request, CCC and Mitchell vowed to “vigorously contest” the FTC in court. Hearings for the request began on Jan. 5.
CCC and Mitchell believe the merger’s benefits would include:
• An expanded communication network to deliver greater connectivity between insurers, repair facilities and other industry service providers and suppliers;
• Expanded research and development resources and a greater ability to enhance current products and services, deliver new technology-based claims solutions and provide faster time-to-market product delivery;
• An expanded sales and service organization, providing better customer service across North America;
• A larger, more comprehensive data warehouse that would improve the company’s ability to deliver industry insights through benchmarking, data analytics and predictive modeling.
The companies said in December 2008 that they remain confident that the merger is “pro-competitive and ultimately will be recognized as such.”
The FTC already has a hearing date for the merger slated for March 31, but if the court grants an injunction, a lengthy administrative trial would likely result. Legal experts say that many companies cancel merger plans if a preliminary injunction is granted to the FTC.
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