U.S. Attorney General Merrick Garland today welcomed the decision by insurance brokers Aon and Willis Towers Watson to terminate their planned $30 billion merger.
“This is a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country,” said Garland in a statement.
The U.S. Department of Justice, which Garland heads, filed a on June 16, 2021, to stop the merger,. DOJ argued that the combination of the world’s second and third largest insurance brokers would reduce competition for the business of American companies, effectively consolidating the industry’s “Big Three” into a Big Two.
The decision to not proceed with the merger ends the litigation with the U.S. Department of Justice.
Update: Aon and Willis Terminate $30B Merger; Aon to Pay $1B Break-up Fee
In his statement, Garland continued:
“American employees and retirees rely on dependable health care and retirement plans provided by their employers. Many of those employers, in turn, rely on insurance brokers like Aon and Willis Towers Watson for managing the complexities of these health and retirement benefits. Businesses also rely on Aon and Willis Towers Watson to compete for the bulk of their risk management portfolio, including property and casualty insurance. The decision to abandon this anticompetitive merger will help preserve competition in insurance brokering.
The proposed combination was first announced on March 9, 2020. The European Commission approved the deal earlier this month,.
Both brokerages had agreed to sell off Willis Re and other WTW assets to Arthur J. Gallagher & Co. for nearly $3.6 billion and complete other divestitures to win approval. They were in negotiations with DOJ over additional issues when they decided to call off the merger. Aon said all promised divestitures were contingent upon the merger being completed.
“Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice,” said Aon CEO Greg Case, in a prepared statement.
“The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point,” Case added.
In connection with the termination of the business combination agreement, Aon will pay a $1 billion termination fee to Willis Towers Watson.
Topics Mergers & Acquisitions USA Aon
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