Aon and Willis Towers Watson cancel merger

27 July 2021 Consulting.us 2 min. read

Aon and Willis Towers Watson on Monday announced a mutual agreement to terminate their combination, citing unacceptable risk and delay from US regulatory authorities. The merger agreement had initially been announced in March 2020. 

The US Department of Justice last month filed a civil antitrust lawsuit to block the $30-billion deal. “Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services, " Attorney General Merrick B. Garland said in a press release.

The court process could have pushed the deal’s closure into 2022, though Aon CEO Greg Case said in a video to employees that “we were confident that we would win in court.”

Had the deal been successful, it would have created the largest insurance broker in the world, with $20.3 billion in annual revenue.

Aon and Willis Towers Watson cancel merger

“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," said Case in a press release. "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."

The European Commission had given conditional approval to the deal earlier this month.

Aon and Willis Towers Watson sold off various portions of their global businesses in May and June to satisfy antitrust objections from regulatory bodies globally. Ultimately those efforts fell short in the US.

Willis Towers Watson in May sold select reinsurance, specialty, and retail brokerage operations to Gallagher for $3.57 billion. That was quickly followed by the sale of Aon’s German investment and retirement business to Lane Clark & Peacock.

In June, Aon agreed to sell its US retirement business to Aquiline Capital Partners and its retiree health exchange to Alight for a combined $1.4 billion.

The above transactions have now been cancelled because they were contingent on the clearance of the Aon-Willis Towers Watson merger.

Aon and Willis Towers Watson will remain independent companies, with a global headcount of 50,000 and 45,000 employees, respectively.

As part of the merger’s cancellation, Aon will pay Willis Towers Watson a termination fee of $1 billion.