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June 17, 2021 at 12:00 AM
What You Need to Know
- Aon and Willis have agreed to sell some assets to resolve antitrust concerns in Europe.
- Aon has agreed to sell two retirement-related businesses to address U.S. Department of Justice concerns.
- Lina Khan took over as FTC chair Tuesday.
The U.S. Justice Department sued to block Aon PLC’s proposed $30 billion acquisition of Willis Towers Watson, saying the deal to create the world’s largest insurance brokerage is anticompetitive.
The department’s antitrust division filed a lawsuit in federal court in Washington asking a judge to stop the deal, arguing that it would create too much concentration in the market and hurt businesses, their employees and retirees.
“If allowed to merge with WTW, Aon likely would use that leverage against American businesses,” the complaint said. “Businesses likely would pay the price in the form of higher fees for lower-quality services for the management of their most complex and expensive commercial risks through insurance and reinsurance.”
Shares of both companies tumbled on the news. Aon shares closed down 3.1%, the most since January. Willis shares fell more than 7% to the lowest point since late April.
The case marks the first lawsuit by the Justice Department to stop a merger under the Biden administration, which has yet to nominate someone to take over the department’s antitrust division. On June 15, the Senate confirmed a Biden nominee, Lina Khan, a Columbia Law School professor, to be the chairwoman of the Federal Trade Commission, which shares antitrust enforcement duties with the Justice Department.
The proposed Aon-Willis deal would combine the second-and third-largest brokers and would allow the new firm to overtake market leader Marsh & McLennan Co.
