The US government has sued to prevent Aon’s acquisition of Willis Towers Watson, threatening $30 billion in transactions Aims to build the world’s largest insurance broker.
The U.S. Department of Justice stated in a complaint on Wednesday that the merger would “eliminate a large amount of frontal competition and could lead to price increases and reduced innovation, harming U.S. companies, their customers, employees and retirees.”
According to the U.S. Department of Justice, Aon and Willis, together with Marsh McLennan, constitute “the insurance brokerage competition that dominates the largest U.S. company, almost all of which are at least one of them.” Company’s customers”.
The US Department of Justice stated that the three major companies have features that small brokers cannot replicate, such as global services, better data and analysis, and “unique sales methods” for risk managers of large companies buying insurance. In terms of health benefits, they are able to design customized products for large multinational customers.
The complaint stated that the merger would “reshape the Big Three into two giants”, and that the united Aon Willis would “use this influence against American companies.”
The shares of these two companies fell during the afternoon trading session in New York, with Aon down 3% and Willis down 7%.
Global acquisitions face regulatory investigations in multiple jurisdictions, most notably the United States and the European Union. In the commercial insurance brokerage business, Aon and Willis have a total share of at least 40% in some key insurance markets such as property loss, third-party liability and financial risks.
U.S. Attorney General Merrick Garland said in a statement: “Today’s actions show that the Department of Justice is committed to preventing harmful mergers and maintaining competition that directly and indirectly benefits Americans across the country.”
Due to delays in regulatory procedures, the expected completion date of the transaction has been postponed from the first half of 2021 to the third quarter.
Last month, Aon and Willis agreed to uninstall $3.6 billion The value of assets, including Willis Re, was sold to rival broker Gallagher to appease European competition regulators.
Aon stated that the transaction resolves the issues raised by the European Commission and “is designed to resolve certain issues raised by regulators in certain other jurisdictions.”
Aon also agreed earlier this month to sell its U.S. retirement business to New York-based Aquiline Capital Partners, and to sell its Aon retiree health exchange business to Alight. Aon stated that these transactions “are aimed at resolving the U.S. Certain issues raised by the Ministry of Justice”.
The U.S. Department of Justice stated in the complaint that the proposed divestiture is not sufficient to resolve its concerns. Regarding the property, financial and casualty risk brokerage and health benefits of large US corporate clients, the remedial measures proposed by these groups “cannot fully maintain competition, otherwise they will lose competitiveness due to the proposed merger.”
Aon did not immediately respond to a request for comment. Willis Towers Watson declined to comment.