Title insurance’s Big Three are not to be: Fidelity, Stewart call off $1.2B merger

Companies made their decision following opposition to the merger from the FTC

From left: Stewart's Frederick Eppinger, FTC's Joseph Simons and Fidelity's Raymond Quirk (Credit: Getty Images and iStock)
From left: Stewart's Frederick Eppinger, FTC's Joseph Simons and Fidelity's Raymond Quirk (Credit: Getty Images and iStock)

The massive merger between Fidelity National Financial and Stewart Information Services that would have turned the country’s “Big Four” title insurers into the “Big Three” is no longer on the table.

Stewart announced on Tuesday that the two companies had made the mutual decision to call off their merger after it did not receive the necessary approval from the Federal Trade Commission. Fidelity will pay Stewart a $50 million reverse termination fee.

The FTC voted 3-1-1 last week to issue a complaint about the merger and authorize staff to seek a temporary restraining order and preliminary federal court injunction to stop it from happening. It claimed that the merger would sharply reduce competition in state and local markets.

“Today’s announcement from Fidelity National Financial, Inc. and Stewart Information Services Corporation that they will abandon their proposed transaction is good news for everyone who requires title insurance when purchasing real estate in the United States,” FTC Bureau of Competition director Bruce Hoffman said in a statement. “These customers will continue to benefit from vigorous competition for title insurance underwriting and title information services.”

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Thomas Apel, Stewart’s chairman of the board, said in a statement that the company was “disappointed with the FTC’s decision” but remains well-positioned for growth. Representatives for Fidelity did not respond to a request for comment.

Stewart also announced changes to its executive leadership team on Tuesday. Director Frederick Eppinger will become CEO, while current CEO Matthew Morris will become president. Current president John Killea will stay on as general counsel and chief legal officer.

Fidelity had signed an agreement to buy Stewart for $1.2 billion in March 2018, a deal that would have made it the nation’s largest title company by a wide margin.

The firm ranked second on The Real Deal’s list of most active title insurers in New York last year with $4.83 billion in total dollar volume. Stewart came in 12th place in New York with $1.21 billion.

The past few years have been a whirlwind for title insurance agencies in New York thanks to multiple conflicting court rulings over whether strict new regulations on the industry from the Department of Financial Services will remain on the books or be overturned.