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Aon announces further $1.4bn divestment to appease US regulators

3rd June 2021 - Author: Charlie Wood

Re/insurance broker Aon has announced the sale of two businesses for a combined total consideration of $1.4 billion, during a week that has seen its acquisition of Willis Towers Watson scrutinised by the US Department of Justice (DOJ).

Aon WillisAs part of the newly-unveiled divestiture, Aon’s US retirement business will be offloaded to Aquiline, while its Aon Retiree Health Exchange business will be sold to Alight.

This is a move designed explicitly to appease the DOJ and ensure the Aon/WTW combination receives US regulatory approval.

It’s a development that seems to confirm reports suggesting the $3.6 billion remedy package Aon tabled in April was insufficient in satisfying opponents to the merger.

Criticism is believed to have been levelled at the package’s absence of any measures intended to address an overlap with WTW in health benefits consulting services.

Concurrently, however, it had also been reported that the feeling among the two brokers that the DOJ was unlikely to challenge their proposed combination.

“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” said Greg Case, Aon’s Chief Executive Officer.

“These are very capable teams that have demonstrated exceptional dedication to our clients and our firm. I want to recognize their contributions and reinforce that we are confident they will have similar opportunities with Aquiline and Alight.”

As part of the US retirement business set to be acquired by Aquiline, Aon will be handing over 1000 colleagues as well as core US retirement consulting, US pension administration and the US-based portion of Aon’s international retirement consulting business, along with various solutions and tools.

The agreement with Aquiline does not include Aon’s non-US actuarial, non-US pension administration or international retirement businesses based outside of the US.

The company has $6.4 billion in assets under management and has successfully invested in numerous businesses that help people plan and save for retirement.

“The retirement solutions sector is benefitting from an increased focus on long-term investment security and risk management of plans,” said Jeff Greenberg, Aquiline’s Chairman and CEO.

“Aquiline’s significant experience across retirement and investments positions us to build on the strong business Aon has created. We look forward to working closely with the clients, management and colleagues of Aon’s U.S. retirement business to create further value for all stakeholders.”

Meanwhile, Aon’s Retiree Health Exchange, due to be acquired by Alight, is an individual market solution designed to support employers and their retirees.

It was the first retiree exchange to meet the National Council on Aging (NCOA) standards and continues to meet or exceed those rigorous standards of excellence in consumer education and health insurance brokerage services for people with Medicare.

Alight leverages proprietary AI and data analytics to help optimise business process as a service (BPaaS) and deliver benefits for employees and employers.

Both agreements are dependent on the US DOJ giving Aon’s WTW purchase the green light and will exist alongside any pre-existing divestment packages or offerings.

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