AG Garland Gets Major Victory as Aon and Willis Towers Watson Call Off Merger

Posted on 07/26/2021

Aon Plc and Willis Towers Watson Plc called off a US$ 30 billion merger, which would have created the biggest insurance broker on the planet. The Department of Justice (DOJ) filed a civil antitrust lawsuit on June 16, 2021, to stop the merger, alleging that the combination of Aon and Willis Towers Watson, the second- and third-largest insurance brokers in the world, would reduce competition for the business of American companies.

Under the Biden administration, U.S. Attorney General Merrick B. Garland stated in a press release, “This is a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country.”

Garland added, “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.”

So far Biden’s administration has shown teeth in anti-trust cases versus AG William (Bill) Barr, who served in the Trump administration. AG Barr spent the later years at the DOJ trying to get the Justice Department to pursue large U.S. tech companies that have market dominance in areas such as advertising, search, and social media. In 2017, the DOJ’s Antitrust Division unsuccessfully sued to block AT&T’s merger with Time Warner.

Aon will pay Willis a US$ 1 billion termination fee.

“Despite regulatory momentum around the world … we reached an impasse with the U.S. Department of Justice,” Aon Chief Executive Greg Case said in a statement.

Earlier, in a video to Aon employees, Case said: “The DOJ position is remarkably out of step with the rest of the global regulatory community and we were confident that we would win in court.”

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