United States: Verisk/Eagleview Merger Derailed By FTC Challenge

On December 16, Verisk Analytics, a leading provider of data analytics and related services to the insurance industry, including rooftop aerial measurement products, announced that it was terminating its efforts to acquire EagleView Technologies, an aerial image provider whose product is utilized in rooftop aerial measurement products. The announcement followed closely on the heels of an FTC announcement that it intended to challenge the transaction on antitrust grounds.

The Verisk/EagleView transaction was first announced in January of 2014 and, with a value of $650 million, was subject to regulatory review for potential antitrust issues. At the time of the announcement of the deal, the parties stated that they expected the deal to close in the summer of 2014. However, FTC review of the transaction delayed the closing, leading to an updated announcement by the parties that they expected to close the deal in September. When September came and went without regulatory approval, the parties announced a year-end target date for closing.

However, the parties' merger plans were derailed when, on December 16, the FTC announced its intention to challenge the transaction. Asserting that, if completed, the deal would "result in a virtual monopoly in the U.S. market for rooftop aerial measurement products used by the insurance industry to assess property claims," the FTC announced the filing of an administrative complaint. In connection with the filing, Deborah Feinstein, the Director of the FTC's Bureau of Competition, stated that "Eagleview is the dominant company and Verisk is the only meaningful competitor offering rooftop aerial measurement products to insurance carriers," and that "if the transaction goes through, insurance carriers, and ultimately consumers, face the risk of higher prices."

In response to the FTC's announcement, Verisk announced that it was discontinuing its efforts to acquire Eagleview, bringing to a close an almost year-long effort to gain regulatory approval. Verisk also announced that a portion of the funds intended for the Eagleview transaction would be used to repurchase $500 million in shares of Verisk.

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