Attorney General Merrick B. Garland has hailed the breakdown of the proposed combination of Aon and Willis Towers Watson (WTW) as a “victory for competition and for American businesses”, as Aon CEO Greg Case notes poor timing and factors outside of their control.
After filing a civil antitrust lawsuit to block the $30 billion merger of Aon and WTW, the U.S. Department of Justice (DoJ) had been preparing to go to trial with the pair of global brokers.
However, after failing to agree on numerous terms the Plaintiff and Defendants reached an impasse, which saw Aon and WTW terminate their agreement and end any hopes of a mega-merger.
Following the decision, Attorney General Merrick B. Garland, commented: “This is a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country.
“American employees and retirees rely on dependable health care and retirement plans provided by their employers. Many of those employers, in turn, rely on insurance brokers like Aon and Willis Towers Watson for managing the complexities of these health and retirement benefits. Businesses also rely on Aon and Willis Towers Watson to compete for the bulk of their risk management portfolio, including property and casualty insurance. The decision to abandon this anticompetitive merger will help preserve competition in insurance brokering.
“The department is grateful for the team of dedicated lawyers, economists, paralegals and support staff who thoroughly investigated the merger and pursued litigation to block this combination for the benefit of American consumers.”
It seems as though timing and the delays to trial in the US were among the main drivers of Aon and WTW’s decision to cancel their proposed combination.
In a video message sent to Aon staff, the broker’s CEO Case accused the DoJ’s stance as being “remarkably out of step with the rest of the global regulatory community,” as he went on to say that while the firm’s confident of a win in court, “the current course with DoJ would have likely taken us well into 2022.”
According to Case, the demands of the US DoJ would have served to stifle innovation and destroy its client-serving capability.
“At best, DoJ’s perspective demonstrates a fundamental misunderstanding of the marketplace. At worst, our combination was blocked by poor timing and other factors outside our control. Ultimately team, our decision was clear, we simply will not compromise colleague and client priorities to close the combination,” said Case.
The rhetoric between the pair shows that meaningful gaps existed and with differences being so vast, it does make you wonder if the deal ever had a chance of clearing competition concerns in the U.S., at least on terms acceptable to Aon and WTW.