The US Department of Justice has filed a civil antitrust lawsuit to block Aon’s proposed acquisition of Willis Towers Watson (WTW).
The US, acting under the authority of the Attorney General of the US, brings this civil antitrust action to prevent Aon from acquiring WTW in violation of the antitrust laws.
Alleged in the complaint filed in the US District Court for the District of Columbia, the “merger threatens to eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services”.
Aon’s announced its intention to buy WTW in March last year in an all-stock transaction with an implied combined equity value of approximately $80 billion.
In the filing, it states that the merger between Aon and WTW would combine two of the “big three” insurance brokers.
The complaint alleges that this merger would eliminate this important competition in five markets, resulting in higher costs to companies, higher costs to consumers, and decreased quality and innovation.
The US Department of Justice states that although Aon and WTW have agreed to certain divestitures in connection with investigations by various international competition agencies, the complaint alleges these proposed remedies are inadequate to protect consumers in the US.
The complaint also alleges the US-focused divestitures in health benefits and commercial risk broking, in particular, are wholly insufficient to resolve the department’s significant concerns.
In December 2020, the European Commission opened an in-depth investigation to assess the proposed acquisition, under the EU merger regulation.
Commenting on the filing, Merrick Garland, attorney general, says: “Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country.”
He adds: “American companies and consumers rely on competition between Aon and WTW to lower prices for crucial services, such as health and retirement benefits consulting. Allowing Aon and WTW to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
