US title insurance companies Fidelity National and Stewart Information decided to call off their proposed merger owing to regulatory hurdles


In March 2018, Fidelity National Financial signed a deal to acquire Stewart Information Services (Credit: Mathew105601 /

Fidelity National Financial and Stewart Information Services have agreed to mutually scrap their previously announced $1.2bn (£970m) merger deal after failing to get approval from the US Federal Trade Commission (FTC).

The decision to terminate the merger deal follows the recent administrative complaint filed by the competition watchdog seeking to block it on grounds of competition concerns.

The FTC authorised its staff to file a lawsuit challenging the proposed transaction citing that it will significantly reduce competition in the state markets for title insurance underwriting for large commercial transactions, and in multiple local markets for title information services. The administrative trial was to begin in early February 2020.

As per the terms of the merger agreement signed in March 2018, Fidelity National, which proposed to buy Stewart, will pay the latter $50m (£40.47m) as termination fees.

The proposed cash-cum-deal would have seen Stewart shareholders exchange each of their shares for $25.00 (£20.21) in cash and 0.6425 common shares of Fidelity.

Stewart caters to the real estate industry with residential and commercial title insurance, appraisal and valuation services, closing and settlement services, and other offerings.

Fidelity National, on the other hand, provides title insurance and transaction services to the real estate and mortgage sectors. The company, through its title insurance underwriters – Fidelity National Title, Chicago Title, Alamo Title, Commonwealth Land Title, and National Title of New York, claims to collectively issue more title insurance policies than any other title company in the US.

According to the FTC, Fidelity National and Stewart are two of the four major title insurance underwriters in the US apart from First American Title Insurance and Old Republic National Title Insurance.

Had the proposed merger closed, the combined Fidelity-Stewart would command more than 43% of sales of all title insurance sales in the country, said the FTC.

The competition watchdog also believes that the proposed deal would significantly erase the head-to-head competition between Fidelity National and Stewart across 45 states and the District of Columbia.

Stewart board chairman Thomas Apel said: “While we were disappointed with the FTC’s decision regarding Stewart’s combination with Fidelity, we are well-positioned to execute on a standalone strategic plan built around growth and profitability.”