The U.S. Department of Justice (DoJ) has filed a civil antitrust lawsuit against Aon’s $30bn proposed acquisition of Willis Towers Watson (WTW).
The lawsuit argues that the mega-merger would bring together two of the “Big Three” global insurance brokers, which would adversely impact competition in the market.
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The complaint filed in the US District Court for the District of Columbia also alleges that the merger would raise prices and reduce innovation for American businesses, employers, and union.
Attorney General Merrick Garland said: “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,” the lawsuit says.
The complaint listed five markets that would be affected by the merger, which include health and retirement, property & casualty, reinsurance broking, financial risk broking and retirement services.
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By GlobalDataIt also alleges that Aon and WTW operate “in an oligopoly” and will have even more leverage when the deal is closed.
Responding to the legal action, Aon and WTW said: “We disagree with the US Department of Justice’s action, which reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate.
“We continue to make material progress with other regulators around the world and remain fully committed to the benefits of our combination.”
Aon and WTW have made some divestments to appease the DoJ authorities. However, the complaint alleges that the proposed remedies are inadequate.
Early this month, Aon agreed to sell its US retirement business to Aquiline and its Aon Retiree Health Exchange business to Alight for $1.4bn.
To obtain regulatory clearance in Europe, Aon and WTW agreed to sell Willis Re to Arthur J. Gallagher for $3.57bn in May 2021.
In the same month, Aon also agreed to sell its German pension business to Lane Clark & Peacock (LCP).
