WASHINGTON (Bloomberg) -- The U.S. approved Cox Automotive Inc.’s $4 billion agreement to buy Dealertrack Technologies Inc., which offers technological assistance to car dealerships, on the condition the companies divest an inventory management services unit to preserve competition.
The companies agreed in August to sell Dealertrack’s inventory management solutions business, Inventory+, which uses algorithms and analytics to help car dealers manage their inventory, to DealerSocket Inc. or another buyer approved by the U.S., according to a Justice Department statement Tuesday.
DealerSocket said that after the purchase Inventory+ would remain in Dallas and run independently from the rest of the DealerSocket product suite.
“Cox’s proposed acquisition of Dealertrack would have allowed Cox to become the dominant inventory management solution provider in the United States,” Assistant U.S. Attorney General Bill Baer said in the statement. “The divestiture will ensure that automotive dealerships in the United States continue to benefit from the competition that now exists among inventory management solution providers.”
Cox Automotive, a unit of Atlanta-based Cox Enterprises, provides vehicle remarketing services and controls the brands Kelley Blue Book, Autotrader, Manheim and others. It has $17 billion in revenue, according to a statement issued by the company last week.
The accord, which settles an antitrust lawsuit filed by the U.S., remains subject to court approval.