US Authorities Block Merger of UK's Largest Insurance Broker Aon

The Biden Administration's First Antitrust Lawsuit

[Asia Economy Reporter Yujin Cho] The Biden administration in the United States has blocked the merger and acquisition (M&A) between Aon and Willis Towers Watson, the world's second and third largest insurance brokerage firms. This lawsuit marks the first antitrust action taken by the U.S. Department of Justice since President Biden took office.

According to the Wall Street Journal (WSJ) on the 16th (local time), the U.S. Department of Justice filed an antitrust lawsuit in the U.S. District Court for the District of Columbia, arguing that the merger of the two companies could hinder market competition, leading to higher service prices.

Aon, a British company headquartered in Ireland, and Willis Towers Watson are considered part of the global "Big 3" insurance brokers along with Marsh & McLennan, which ranks first in revenue worldwide. Marsh & McLennan is headquartered in New York, USA.

The combined revenue of the two companies was $20 billion (approximately 22.38 trillion KRW) last year, surpassing Marsh & McLennan's $17.2 billion.

Attorney General Merrick Garland explained the background of the lawsuit, stating, "If the two companies merge, important competitive dynamics in areas such as health insurance and pension consulting will be damaged, reducing consumer choice and potentially increasing service prices while lowering quality."

Aon and Willis Towers Watson have been reducing their size through asset sales to alleviate antitrust concerns, but the U.S. Department of Justice judged that these efforts are insufficient to address the harms caused by the merger.

WSJ reported that although the Biden administration has not yet completed appointments to its antitrust policy team, the current situation suggests it will actively block anticompetitive practices by large corporations.

The Biden administration nominated Lina Khan, known as a "Big Tech killer," as chair of the U.S. Federal Trade Commission (FTC) the day before.

The European Union (EU) competition authority, the executive branch of the EU, has also expressed concerns that the merger could reduce consumer choice. The EU Commission is expected to decide whether to approve the merger by August 3.

Meanwhile, in a statement released on the same day, the two companies said they disagree with the lawsuit, arguing that the U.S. Department of Justice does not properly understand the market and their business.