NEW YORK ( TheDeal) -- Springleaf Holdings (LEAF) - Get Report plan to buy OneMain Financial, the the consumer finance unit of Citigroup (C) - Get Report, faces an antitrust review from the Department of Justice. The investigation is likely to lead to DOJ-ordered divestitures in order to win antitrust clearance, regulatory experts said.
The acquisition would make Springleaf the largest subprime lender in the U.S. with approximately 2,000 branches and a national footprint covering 43 states. The merged company will also have nearly $14 billion in core consumer net finance receivables.
The DOJ on Tuesday issued a civil investigative demand to the companies seeking information regarding the proposed acquisition and the marketplace in which Springleaf and OneMain operate, Springleaf said in a filing to the
Securities and Exchange Commission
. "We are in the process of responding to the DOJ's request, and we intend to work cooperatively with the DOJ to resolve any questions that the DOJ may raise concerning the proposed acquisition," Springleaf said in its filing.
The company said the parties also have been contacted by the Colorado Attorney General's Office regarding the deal. The Colorado AG, along with other state attorneys general, coordinate antitrust reviews with the DOJ.
The $4.25 billion cash sale of OneMain was announced March 3.
Springleaf and Citi first learned of the DOJ's interest in the deal on March 22, when the agency's Antitrust Division notified them it would be reviewing the transaction from an antitrust perspective. The parties subsequently met with, and provided information to the DOJ staff and received a voluntary request for information from the agency.
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