Aon PLC and Willis Towers Watson PLC abandoned a more than $30 billion tie-up to create the world’s largest insurance broker, deciding it wasn’t worth pursuing in the face of Justice Department opposition to the merger.
The DOJ filed a lawsuit against the deal last month, the first big test of the Biden administration’s more muscular antitrust policy. The suit, filed in a federal court in Washington, said that the proposed merger would lead to higher prices and reduced innovation for U.S. businesses, employers and unions that rely on their services.
In a statement, U.S. Attorney General Merrick Garland called the decision “a victory for competition and for American businesses, and ultimately, for their customers, employees and retirees across the country.”
The brokers, which announced their deal in March 2020, help companies buy insurance and advise them on risk management. They work on behalf of their corporate clients, earning fees by negotiating insurance packages across a range of property-casualty insurers. Aon and Willis Towers also are major consultants to businesses on health and other benefit packages for their employees.
The Justice Department lawsuit followed an investigation of more than a year. Aon and Willis Towers had agreed to sell an assortment of different assets to smaller rivals to appease Europe’s antitrust regulator and the Justice Department by creating new and larger competitors. While the European Commission signed off on those moves, the DOJ argued they didn’t go far enough.