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Aon / WTW combination subject to EU antitrust warning, says Reuters

3rd March 2021 - Author: Luke Gallin

Insurance and reinsurance broker Aon’s proposed $30 billion merger with Willis Towers Watson (WTW) is to be subject to an EU antitrust warning unless the company offers concessions, according to Reuters.

aon-willis-towers-watson-logosAfter confirming in December 2020 that it would conduct an in-depth investigation of the transaction, noting concerns it could have negative implications for competition, the European Commission (EC) later halted its investigation while it awaited more information from Aon.

In the latest development of the deal, which is scheduled to complete in the first half of 2021, Reuters, citing two people familiar with the matter, has claimed that Aon faces an EU antitrust warning unless it offers concessions in the weeks ahead.

Reuters’ sources have said that the EC is preparing a statement of objections, a charge sheet explaining potential competitive harm as a result of the mega-merger.

Of course, this would likely extend the regulatory process and could potentially move the closing date further into 2021 than Aon had hoped.

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To avoid this, Reuters reports that the broker will have to offer concessions to address the regulators’ concerns around competition. According to the two people, Aon has been in informal talks about concessions but has not made an official offer to date.

As well as in Europe, competition concerns have also been raised in New Zealand and Australia, although Aon and WTW have previously cited a range of competitive dynamics in defence of their proposed combination.

The transaction, which will be the largest insurance and reinsurance broker merger or acquisition in history, has certainly attracted a lot of attention and as we wrote recently, this includes from investors in the merger arbitrage and event driven hedge fund space.

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