What Happened: In a press statement, Aon CEO Greg Case pointed out that the two London-headquartered companies received regulatory approval from the Europe Commission and enjoyed “regulatory momentum around the world,” but he blamed the DOJ for creating an “impasse” which made the transaction impossible to conclude.
“The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy,” Case said. “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.”
Aon will pay a $1 billion termination fee to Willis Towers Watson for the canceled deal.
“We believe we are well-positioned to compete vigorously across our businesses around the world and will continue to introduce important innovations to the market,” said Willis Towers Watson CEO John Haley. “We appreciate and deeply respect all the Aon colleagues we got to know through this process.”
Why It Happened: The DOJ sought to halt the transaction with a civil antitrust lawsuit filed on June 16, which argued the merger would eliminate competition within the insurance industry.
In announcing the lawsuit, U.S. Attorney General Merrick Garland said his department was committed to “stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country. American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting.
“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,” Garland added.
Last week, a federal judge narrowed the lawsuit after the companies agreed to several divestitures, including Aon’s U.S. retirement unit and retiree healthcare exchange and Willis Towers Watson’s global reinsurance business.
Despite the collapse of the deal, Aon announced it was extending the employment agreements for Case and chief financial officer Christa Davies for an additional three years, through April 1, 2026.
This story originally appeared on Benzinga. © 2021 Benzinga.com.
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