Justice Department Sues to Block Aon Acquisition of Willis Towers Watson

The lawsuit marks the Justice Department’s first main antitrust motion through the Biden administration, although it has been investigating the deal for greater than a yr.

“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,” Attorney General

Merrick Garland

stated. “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.”

A spokesman for Willis Towers declined to remark. A spokesman for Aon stated the corporate had no speedy remark.

Aon and Willis Towers, each registered in Ireland, are two of the world’s largest insurance coverage brokerages by income, alongside New York-based Marsh & McLennan Cos.

In March 2020, Aon and Willis Towers announced their deal, which might create an enormous with complete annual income of extra $20 billion, in contrast with Marsh & McLennan’s $17.2 billion. The brokerages assist firms purchase insurance coverage and advise them on threat administration.

Aon is also a serious guide to companies on health and different profit packages for his or her staff.

Currently, Aon, Willis Towers and Marsh & McLennan every have the worldwide attain and variety of merchandise to supply a one-stop store of dealer providers that many firms working internationally depend on to purchase insurance coverage.

Aon and Willis Towers have aggressively sold off assets in recent weeks to smaller rivals to create new and bigger rivals, in a bid to appease regulatory issues over competitors within the U.S., the European Union and Asia. Some analysts have stated these offers could possibly be seen by regulators as too small to make a significant distinction within the potential of patrons of the belongings to rival a mixed Aon-Willis Towers and Marsh & McLennan globally on worth.

The Justice Department in its lawsuit argued the businesses’ divestitures fell far quick of what is required to tackle the harms posed by the merger.

Career Justice Department workers have been investigating the transaction and its potential affect, as is typical in merger instances. President Biden hasn’t but nominated a political official to lead the division’s antitrust division, however its work has continued steadily through the transition between administrations.

Antitrust officers with the European Commission, the EU’s government body, even have expressed issues that the merger, if left unchecked, may slim buyer selection and provides the mixed entity an excessive amount of sway over the costs that shoppers have to pay for monetary safety in opposition to property and casualty damages, commerce tensions and cybercrime.

The European Commission is predicted to make its choice on whether or not to approve the merger by Aug. 3.

Failure to full the deal would put in danger the monetary benefits the 2 firms anticipated to achieve from it. Aon and Willis Towers stated the acquisition would generate annual price financial savings of $800 million and increase income by means of the sale of new merchandise to assist shoppers handle dangers in reference to areas together with local weather change and mental property.

In early June, Aon Chief Executive Greg Case introduced further divestitures that the corporate stated have been meant to tackle questions raised by the Justice Department, and he expressed confidence the deal can be wrapped up. “These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” he stated on the time.

While the timing of the transaction’s shut has remained unsure, quite a few Wall Street analysts have thought of the deal on monitor although probably requiring extra divestitures associated to antitrust issues.

—Leslie Scism contributed to this text.

Write to Brent Kendall at brent.kendall@wsj.com and Ben Dummett at ben.dummett@wsj.com