DOJ CLOSES INVESTIGATION OF FIDELITY’s ACQUISITION OF METAVANTE

On September 3, the companies announced that they received clearance from the Department of Justice to complete their proposed merger without conditions.
The DOJ issued a second reqeust around June 22. The entire investigation took approximately four months. The second request period, however, was relatively short as it lasted only about two months. Despite the extra time for the review, the DOJ staff demonstrated that it is still very efficient in handling merger investigations that do not raise serious antitrust concers.

This deal raised a number of antitrust issues that resulted in a short investigation, but in the end, there were no significant antitrust concerns. Competition in core banking software solutions is very fragmented. There is a lot of competition across various segments of the industry. Fiserv and Jack Henry have considerable market share in various segments. Infosys, Oracle’s I-Flex, SAP, and Temenos are big players in this industry as well. Temenos has 30 customers of all sizes in the United States. Temenos is a strong competitor given that it was Metavante’s technology partner prior to the merger. Once Metavante broke its agreement with Temenos, any serious antitrust concern with the merger with Fidelity was eliminated. SAP provides core banking solutions to banks throughout the world and has entered the United States. Oracle’s Iflex is present in the United States and is a huge player in foreign markets. Competition is driven by functionality rather than by price. Customers are highly sophisticated. For all these reasons, the DOJ closed its investigation without any conditions because the competition concerns were minimal. This a situation where the DOJ needed a little more time to conduct due diligence.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com