Global re/insurance brokers Aon and Willis Towers Watson (WTW) are said to have been surprised by the U.S. Department of Justice’s (DOJ) decision to block their proposed combination, amid reports the parties were not offered a so-called ‘last rites’ meeting with leadership.
Last week, the DOJ filed a civil antitrust lawsuit to block the proposed $30 billion mega-merger, citing the creation of a “broking behemoth” that would eliminate competition and increase prices.
In response, some analysts believe that further divestiture is a more likely outcome than the deal being abandoned completely – a move which would see Aon pay WTW a $1 billion termination fee.
Following the DOJ’s announcement, Aon and WTW expressed their disagreement and accused the DOJ of failing to understand their businesses, clients, and the markets in which they operate.
Typically, a company is offered a final meeting with the DOJ before a lawsuit is filed, but according to specialist antitrust and mergers and acquisitions (M&A) publisher, CTFN, this never happened and as such, the decision took Aon and WTW by surprise.
The firms had a meeting the week prior, but did not receive an invitation to the traditional meeting where companies can try to offer some final remedies in an effort to satisfy regulatory concerns, reports CTFN, citing a source familiar with the matter.
Consequently, both Aon and WTW appeared to be “surprised” by the DOJ’s lawsuit.
While it remains to be seen what happens next in the saga, Aon and WTW are likely prepared to offer more to get the deal closed.
Gallagher has already agreed to acquire Willis Re and other WTW assets as part of the remedy package, and as noted by the company’s CEO recently, is willing and able to take on more business if necessary.