Aon and Willis Towers Watson terminate proposed merger

Aon and Willis Towers Watson (WTW) have agreed to terminate their proposed $30bn (£21.5bn) merger following an “impasse” with the US Department of Justice (DoJ).

The US DoJ had filed a civil antitrust lawsuit to block Aon’s planned acquisition of WTW due to competition concerns.

Commenting on the decision, Aon CEO, Greg Case, said: "Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the US DoJ.

"The DoJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point."

In connection with the termination of the merger agreement, Aon will pay the $1bn (£725m) termination fee to WTW, WTW's proposed scheme of arrangement has now lapsed, and both companies will "move forward independently".

The proposed deal was agreed between Aon and WTW in March 2020 and would have created a combined equity value of around $80bn (£57.2bn).

In its lawsuit, the US DoJ warned that the merger of two of the 'big three' insurance brokers would create a broking “behemoth”, threaten to eliminate competition, raise prices and reduce innovation for American businesses, employers and unions that rely on these services.

Aon and WTW had previously taken steps to reduce competition concerns in the US and Europe by agreeing to certain divestures in connection with various investigations by international competition agencies.

However, the DoJ's lawsuit warned that these were "wholly insufficient" to resolve the department's concerns.

The proposed merger had been approved by the European Commission earlier this month.

Case added: "Over the last 16 months, our colleagues have turned potential challenges into opportunities to advance our Aon United strategy.

"We built on our track record of innovation, continued to deliver industry-leading performance and progress against our key financial metrics and move forward with the strongest colleague engagement and client feedback scores in over a decade.

"Our respect for WTW and the team members we've come to know through this process has only grown."

WTW CEO, John Haley, commented: "Our team's resilience and commitment are a source of pride and confidence. They have continued to bring to life WTW's compelling value proposition to better serve our clients in the areas of people, risk and capital.

"Going forward, our focus remains steadfast on our colleagues, our clients and our shareholders. We believe we are well-positioned to compete vigorously across our businesses around the world and will continue to introduce important innovations to the market. We appreciate and deeply respect all the Aon colleagues we got to know through this process."

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