As the saga surrounding the proposed combination of brokers Aon and Willis Towers Watson (WTW) continues, sources suggest that an expansion of the deals divestment package needs to include the U.S. to appease the Department of Justice (DoJ).
The mega-merger of rival insurance and reinsurance brokers Aon and WTW has, unsurprisingly, been subject to antitrust investigations in Europe and elsewhere as regulators looks to address competition concerns.
On April 9th, concessions were submitted to the European Commission (EC) prompting the regulator to restart the clock on its investigation and the proposed transaction.
Although unconfirmed by Aon, recent reports suggest that the planned divestments in Europe include the sale of reinsurance broker Willis Re, and also WTW’s European insurance units in France, Germany, Holland, and Spain.
Additionally, WTW CRB finpro & cyber specialty based in the UK, alongside WTW units in Italy, Poland and Portugal are reportedly in the mix. WTW Aerospace manufacturing/space has also been noted as part of the package, as is the sale of Aon’s German retirements benefits business.
However, while these proposals could well be enough to appease the EC, it’s important to remember that antitrust concerns have been raised in other parts of the world, notably in the U.S., Australia, New Zealand, and most recently Singapore.
With this in mind, market sources suggest that additional divestments with a focus on the U.S. might be needed to satisfy the concerns of the the U.S. Antitrust Division of the DoJ.
According to sources and a range of reports, this could include the sale of WTW CRB in San Francisco in an effort to appease the DoJ, combined with the divestiture of WTW CRB in Houston, and the sale of the WTW Bermuda insurance unit. While WTW Miami, which has witnessed a huge defection of team members to rival broker Lockton and other places in recent times, is also believed to be a target.
As we wrote recently, divestment proposals offered to the EC do not address competition concerns elsewhere in the world, so the need for additional remedies in places like the U.S. and Asia isn’t a surprise.
Previously, specialist antitrust publications suggested that concerns in the U.S. over the deal are focused on reinsurance, as well as in other areas like benefits and large corporate clients.