The US Department of Justice has voiced antitrust concerns against the $44 billion merger of S&P Global and IHS Markit.
The Justice Department requires HIS Markit to divest three of its price reporting agency (PRA) businesses to resolve the concerns. It announced last Friday that it has filed a civil antitrust lawsuit against the merger and it will proceed with it unless the two companies resolve the issues in question.
IHS is required to divest Oil Price Information Services (OPIS), Coals, Metals, Mining (CMM), and PetrochemWire (PCW) to Dow Jones in order to maintain fair competition and protect customer access to essential pricing information.
Additionally, the Justice Department has required OPIS to end a 20-year non-compete agreement with GasBuddy, which is preventing the retail gas price information app from launching a data service in this sector.
Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division, said:
Without these significant divestitures, the proposed merger would have led to higher prices and lower quality for PRA customers throughout the United States. The divestitures will preserve competition for PRA services, which are vital to the proper functioning of commodity markets and promote transparency in the financial markets. The remedy also demonstrates the department’s commitment to curtail the anticompetitive use of non-compete agreements.
S&P Global and London-based information provider IHS Markit have agreed to merge their businesses in a $44 billion deal. The two companies have been working with regulatory institutions on the proposed merger to resolve antitrust concerns.
Earlier in October, the European Commission granted a conditional Phase 1 approval of the merger. The EC raised concerns that the acquisition would reduce competition and lead to potential price increases. In response, S&P Global has agreed to divest CUSIP Global Services and its Leveraged Commentary and Data (LCD) business, together with a related family of leveraged loan indices.
The two companies have also agreed to divest IHS Markit’s OPIS, Coal, CMM and PCW businesses. IHS Markit and S&P Global revealed earlier that they are exploring a divestment option of IHS Markit’s base chemicals business in response to concerns raised by the United Kingdom’s Competition and Markets Authority.
