Having said that Aon’s acquisition of Willis Towers Watson (WTW) could significantly lessen competition in the supply of commercial risk, reinsurance and employee benefits broking and advisory services in Australia, the country’s competition regulator has now pushed back the end-date of its review of the deal.
Back in February, the Australian Competition & Consumer Commission (ACCC) became one of the most vocal on the proposed combination of insurance and reinsurance brokers Aon and Willis Towers Watson, citing a range of competition related concerns.
ACCC Commissioner Stephen Ridgeway had said the Commission was “Concerned that the combination of Aon and WTW will remove a significant competitive constraint from the markets for commercial risk broking to large customers or those with more complex and/or high-value insurance premiums; reinsurance broking; and employee benefits broking in Australia.”
The Commission also noted how critical reinsurance capital is to the Australian insurance market, worrying that that the proposed merger could reduce insurers’ choice of reinsurance brokers in an already concentrated market, leading to potential price increases or reduced service levels.
As a result, the Australian regulators review of the merger is seen as an important step in the approval process for Aon, as it seeks to merge with the WTW business globally.
But it seems this is now set to drag on a little longer, with the Australian Competition & Consumer Commission (ACCC) saying that it is still awaiting additional information from the merger parties to help in its completion of the review.
Because of this delay in receiving information from Aon and Willis Towers Watson, the ACCC said that it will now push-back the end-date of its review.
Originally the end-date had been May 27th 2021, but this will now push-back to an as yet unannounced date, with the ACCC saying it will announce a proposed decision date in due course.
Approval in market’s like Australia is key for Aon as it progresses the proposed merger. While Australia is also a key market as it is one where choice is less available, especially in areas like reinsurance broking, so the decision of the ACCC will be closely watched by other competition authorities in certain regions of the world.
With reports suggesting that Aon has submitted a remedy offer to the US Department of Justice Antitrust Division, as it seeks to gain approval for its planned acquisition of rival Willis Towers Watson (WTW) and negotiations ongoing with the European Commission, it looks like the merger parties are going to have a very busy few weeks as global regulators near the crucial point of their reviews of the transaction.