Dive Brief:
- Aon and Willis Towers Watson terminated their merger agreement in order to end litigation with the U.S. Department of Justice, Aon announced July 26. Aon will pay a $1 billion termination fee to Willis Towers Watson as part of the agreement.
- Aon originally sought to acquire Willis Towers Watson for nearly $30 billion in stock, a deal that was among the biggest ever made in the professional services industry, according to Bloomberg.
- DOJ alleged that combining the two large insurance brokers would harm competition in property, casualty and financial risk coverage; and health-and-benefit coverage for employees.
Dive Insight:
Aon and Willis Towers Watson are among the biggest names in brokerage and advisory, and their previously announced merger — while a reflection of ongoing M&A in the space — was big news in 2020. Combined, the companies said they would share their expertise on risk management, particularly in cybersecurity, intellectual property, climate change and health solutions.
While a federal judge narrowed the scope of DOJ’s lawsuit July 21, the remaining charges that would have gone to trial regarded those very issues, Reuters reported.
"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," Aon CEO Greg Case said in a statement. "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 risk landscape for employers has shifted considerably in the post-pandemic world as companies turn toward hybrid working models. Cybersecurity and compliance will be big focus points as 2021 continues.
Notably, the Biden DOJ is poised to crack down on antitrust cases even amid an atmosphere of increasing M&A, the Washington Post reported; Jonathan Kanter, a known "adversary" to big tech, has been tapped to lead the department’s antitrust team.
