Giant insurance brokers Aon and Willis Towers Watson have mutually agreed to terminate their proposed merger following an antitrust lawsuit brought by the US Department of Justice (DOJ).
The proposed takeover of Willis Towers Watson by Aon was valued at $30bn and would have created the world’s largest broking house, with a major marine portfolio.
“We reached an impasse with the US Department of Justice," Aon chief executive Greg Case said.
"We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point."
The Justice Department complaint, filed in the US District Court for the District of Columbia, said the merger threatened to “eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services”.
Aon has agreed to pay a $1bn termination fee to Willis Towers Watson and both companies have agreed to “move forward independently”.
The tie-up was first announced in March last year. It would have created a formidable partnership as a marine insurance brokerage and challenged the broking giant which was created through the acquisition of JLT by Marsh in 2019.
Leading players
Aon and Willis Towers Watson are both leading players in all sectors of marine insurance including protection and indemnity, hull and machinery, cargo, marine liability and war risk.
Both companies’ global marine chief executives — Lee Meyrick for Aon and Ben Abraham for Willis Towers Watson — are based in London.
The merged entity promised to bring the benefits of economies of scale, access to global capacity and increased digitalisation to the shipping industry.
However, shipowners have privately expressed concern over the growing consolidation of marine insurance brokerage. It has been argued the increasingly corporate style of the mega brokers has led to a more formalised and complex process of agreeing marine insurance.
A number of smaller boutique broking houses have been marketing themselves as having a more personal approach to counter the emergence of the giant broking houses.
