Antitrust: US DOJ Sues To Block Major Insurance Merger

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The US Justice Department under President Biden has taken up its first major corporate antitrust case, in the insurance industry. It’s sued to block the proposed merger of Aon and Willis Towers Watson, two of the “big three” insurance brokers.

  • Aon and Willis Towers agreed to a deal to combine in March 2020. The merger value was $30bn at the time the deal was announced but would be worth $34bn today. 
  • Both companies are two of the world’s three largest insurance brokerages by revenue and their combination would obviously reduce competition in the global market. Aon is based in the US and Willis in London. 
  • The US DOJ is not having it with the planned merger and has sued to block the deal. It charges that it’ll “reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
  • The DOJ is challenging the merger despite certain divestitures that Aon and Willis Towers have agreed to in connection with investigations from international antitrust agencies. On its part, that isn’t adequate to let the deal go through.
  • As usual with cases like this, the DOJ will battle it out in court with lawyers from Aon and Willis Towers, if both companies insist on going through the deal. In several similar cases, the companies that got sued decided a fight with the government wasn’t worth it and backed out of their deals. 
  • As it was proposed, the merger of Aon and Willis Towers would create a behemoth insurance brokerage with $20bn in annual revenues and nearly 100k employees worldwide.
  • Originally, the merger was planned for completion in the first half of 2021, but with the DOJ’s challenge, it’s obvious that isn’t happening as smoothly as planned.

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