FTC delays ZillowÕ acquisition of Trulia

Parties agree not to complete deal until Feb. 1, 2015

Zillow (Z) has agreed to delay its acquisition of Trulia (TRLA) until at least Feb. 1, 2015, due to continued requests for information from the Federal Trade Commission.

The FTC was already reviewing Zillow’s proposed $2.9 billion acquisition of Trulia, its closest competitor in online real estate, over any potential anti-trust violations.

In September, the Wall Street Journal raised reported questions from the FTC about whether a Zillow-Trulia combination could have an anti-competitive impact in trying to grow its advertising revenue. The FTC, the article states, made a "second request" for more information on the proposed merger because of concerns over how much of real estate advertising the firm actually controls or could control, and whether online and offline advertising are separate.

According to an 8-K filed by Zillow with the Securities and Exchange Commission, when Zillow and Trulia received the second request for information, the two companies entered into an agreement with the FTC that they would not complete the merger prior to 60 days after both Zillow and Trulia “substantially comply” with the second request for information.

Zillow’s 8-K goes on to say that on Nov. 10, Zillow entered into an amended agreement with the FTC not to consummate the merger prior to 11:59 p.m. Eastern time on Feb. 1, 2015.

Zillow does note that neither the original agreement with the FTC or the amended version prevents the Trulia acquisition from being completed earlier than Feb. 1, if the FTC “grants early termination, closes its investigation or accepts for public comment a proposed consent agreement settling the matter.”

Zillow also said that both Zillow and Trulia still expect the deal to be completed in the first half of 2015.

Requests for information from the FTC are common in business dealings of this kind, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The transaction, which was announced July 28, 2014, is subject to approval of both companies' stockholders and satisfaction of other customary closing conditions, including expiration or termination of the waiting period under the Act.

“Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals,” Zillow CEO Spencer Rascoff said when the acquisition was originally announced.

“Both companies have been enormously successful in creating compelling consumer brands and deep industry partnerships, but it’s still early days in the world of real estate advertising on mobile and Web."

During a conference call on the deal, Rascoff said the real ad potential for the two companies is working to move real estate marketing from offline to online.

"Better agents make for better advertisers," he said, adding agents still spend on mailers and billboards, but the mobile revolution will likely drive them to either Zillow, Trulia or both.

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