Reuters
Published Jul 26, 2021 08:14AM ET
Updated Jul 26, 2021 08:56AM ET
(Reuters) -Insurance brokers Aon (NYSE:AON) Plc and Willis Towers Watson (NASDAQ:WLTW) Plc said on Monday they had agreed to terminate their $30 billion merger agreement and end their litigation with the U.S. Department of Justice.
The deal would have put London-headquartered Aon ahead of the world's largest insurance broker Marsh & McLennan Cos Inc.
"Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice," Aon Chief Executive Officer Greg Case said in a statement.
Aon will pay $1 billion as termination fee to Willis, it said.
In June, the Department of Justice (DOJ) had sued to block the deal, saying it would reduce competition and could lead to higher prices.
The DOJ had alleged that combining the two large insurance brokers would harm competition in reinsurance broking, retirement and pension planning and private retiree multicarrier healthcare exchanges.
A federal judge had narrowed the scope of the lawsuit last week, which came after Aon and Willis agreed to divestitures to win approval in the United States and Europe after discussions with regulators.
The divestitures included Aon's U.S. retirement unit, U.S. retiree healthcare exchange and retirement business in Germany. Also included was Willis Towers Watson's global reinsurance business. EU antitrust regulators approved the merger earlier this month conditioned on some of the sales.
Aon ranks second and Willis fifth among U.S. commercial insurance brokers in the U.S. market, according to a survey by Business Insurance magazine.
The other largest brokers in the United States are Marsh & McLennan, Arthur J Gallagher & Co (NYSE:AJG) and Alliant Insurance Services Inc.
In April, insurance company Chubb (NYSE:CB) Ltd said it was no longer looking at buying smaller rival, the Hartford Financial Services Group (NYSE:HIG) Inc, after the latter rebuffed Chubb's takeover bids post declining to engage in talks on the $23.24 billion buyout proposal.
Aon's shares were up 4% at $242, while Willis Tower's stock was down 3.5% at $218 in pre-market trading.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.