Merger with WTW would have been a good deal, says Aon CEO

As reported by Pensions Expert, Aon and Willis Towers Watson announced in March 2020 a plan to combine their businesses to create the world’s largest insurance broker. 

The two companies’ investment and benefits consultancies and fiduciary management offerings would also have been combined, creating a dominant UK player in these sectors.

They had agreed to sell several US and German subsidiaries in a bid to get the deal approved, and had received the assent of the European Commission’s competition watchdog.

However, the deal was cancelled in late July after an intervention from the US Department of Justice.

The US regulator said the deal threatened to “eliminate sustainable head-to-head competition and would likely lead to higher prices and less innovation”.

Case rejected the DoJ’s assessment, pointing to the green light that European regulators had given the takeover.

Speaking to the Financial Times, he said: “We know our industry, it’s incredibly competitive in every way, our clients have tremendous options and we were about trying to give them even more options.”

He added: “We were well advised from the beginning.”

The Aon CEO insisted that the company has emerged stronger from this episode. 

According to the FT, Aon’s share price jumped when the deal fell through and has pushed on to record highs after its second-quarter results revealed the strongest organic revenue growth in more than a decade. 

Case is also not giving up on further acquisitions. “We’ve always had a strong pipeline and we’ll continue to have a strong pipeline, but we’ll also trade-off against organic investments as well,” he said.

However, Aon and Willis Towers Watson are now facing a potentially lengthy legal battle or having to make disposals that would have reduced the benefits of the deal, the FT reported.

Aon is also facing up to $400m (£288m) in costs, on top of the $1bn termination fee it must pay Willis Towers Watson.