Reinsurance News

CMA begins investigation into Gallagher’s acquisition of Willis Re

5th October 2021 - Author: Luke Gallin

The UK’s Competition and Markets Authority (CMA) is investigating the expected acquisition of the treaty reinsurance business of Willis Re to brokerage Arthur J. Gallagher & Co (Gallagher).

GallagherIt was announced in August that Gallagher had reached an agreement to acquire the treaty reinsurance operations of Willis Towers Watson (WTW).

Initially, Gallagher had agreed to take on the whole of Willis Re and certain other WTW assets as part of a remedy package designed to satisfy competition concerns over the proposed merger of Aon and WTW.

But owing to hurdles in the U.S., Aon and WTW terminated their proposed combination, a move which saw Gallagher’s acquisition of Willis Re and WTW assets break down as well.

Less than month after the termination was announced, Gallagher revealed it had reached an agreement with WTW to acquire just the treaty operations of Willis Re for an initial gross consideration of $3.25 billion; a figure which could rise by another $750 million dependent on certain third-year revenue targets.

Stratumn, by SIA Partners

It’s this deal that the CMA is now investigating. In a statement released today, the CMA says that it is considering whether this transaction, if successful, “will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

To assist with its assessment into the acquisition, the CMA invites comments from any interested party until October 19th, 2021.

Currently, the CMA has set a deadline for its phase 1 decision for 29th November 2021, noting that this date is the current statutory deadline by when the decision will be announced. However, there’s no guarantee that the decision will be announced on or before this deadline, as this can change for a host of reasons.

Back in August when the deal was announced, Gallagher said that the transaction is expected to close no later than the end of the first quarter of 2022, subject to regulatory approvals.

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