Aon, Willis Towers Watson scrap $30bn merger deal amid DOJ lawsuit
Aon and Willis Towers Watson have agreed to scrap their previously announced $30 billion merger after finding it difficult to get an approval from the US Department of Justice (DOJ).
The two companies also announced that they will end their litigation with the justice department. It can be noted that the federal executive department had filed a civil antitrust lawsuit in June 2021 with an objective to block the merger, citing that it will create a broking behemoth, while killing competition between two of the “big three” insurance brokers.
Aon and Willis Towers Watson announced the signing of the merger deal in March 2020 with an aim to create the largest insurance broker in the world with an implied combined equity value of around $80 billion.
The scrapping of the all-stock deal follows a conditional approval given by the European Commission in June 2021.
Aon, Willis Towers Watson scrap $30bn merger deal amid DOJ lawsuit. Photo courtesy of Ken Lund from Reno, Nevada, USA/Wikimedia Commons.
Greg Case — Aon CEO said: “Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice.
“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 light of the cancellation of the merger deal, Aon will pay a termination fee of $1 billion to Willis Towers Watson. The latter’s proposed scheme of arrangement has now expired, and the two organizations will work independently.
John Haley — Willis Towers Watson CEO said: “Our team’s resilience and commitment are a source of pride and confidence. They have continued to bring to life Willis Towers Watson’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.”