Biden's Antitrust Blockade Leads to Collapse of UK Aon Merger

Biden's First Antitrust Lawsuit Victory

Photo by WSJ

[Asia Economy Reporter Yujin Cho] The creation of the world's largest insurance brokerage company was thwarted by the antitrust drive of the U.S. Biden administration.

On the 26th, according to the Wall Street Journal (WSJ), Aon and Willis Towers Watson announced that they have decided to withdraw their $30 billion (approximately 34.65 trillion KRW) merger and settle the lawsuit with the U.S. Department of Justice.

This decision came just one month after the U.S. Department of Justice filed an antitrust lawsuit in federal court, arguing that the merger between the two companies could hinder market competition and lead to higher service prices.

To address monopoly concerns, Aon and Willis Towers Watson had been reducing their size through asset sales. However, it was judged that asset sales were insufficient to eliminate the negative effects of the merger, and the expectation of prolonged court proceedings was cited as the main reason for the merger's collapse.

Aon, a British company headquartered in Ireland, and Willis Towers Watson are considered part of the global big three insurance brokers along with Marsh & McLennan, the world's number one by revenue, which is headquartered in New York, USA.

If the two companies had merged, their combined revenue would have reached $20 billion last year, surpassing Marsh & McLennan's $17.2 billion.

Due to the failed merger, Aon will have to pay Willis Towers Watson a breakup fee of $1 billion.

Greg Case, CEO of Aon, issued a statement saying, "We have been cornered because of the U.S. Department of Justice," and added, "The Department of Justice overlooked the fact that our complementary businesses operate across broad and competitive areas of the economy."

Earlier, the Biden administration nominated attorney Jonathan Kanter, who has fought against big tech companies, as head of the DOJ's antitrust division last week, and appointed Lina Khan, known as a big tech company killer, as chair of the U.S. Federal Trade Commission (FTC), demonstrating an active stance against antitrust violations.

Meanwhile, the European Union (EU) executive body, the European Commission's competition authority, has also expressed concerns that the merger could reduce consumer choice. The EU Commission is expected to decide on the merger approval by August 3.