Aon (AON) and Willis Towers Watson (WLTW) Mutually Agree to Terminate Combination Agreement
Aon plc (NYSE: AON) and Willis Towers Watson (NASDAQ: WLTW) announced that the firms have agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice (DOJ). The proposed combination was first announced on March 9, 2020.
"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," said Aon CEO Greg Case. "The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. 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."
Case added, "Over the last 16 months, our colleagues have turned potential challenges into opportunities to advance our Aon United strategy. We built on our track record of innovation, continued to deliver industry-leading performance and progress against our key financial metrics and move forward with the strongest colleague engagement and client feedback scores in over a decade. Our respect for Willis Towers Watson and the team members we've come to know through this process has only grown."
"Our team's resilience and commitment are a source of pride and confidence. They have continued to bring to life Willis Towers Watson's compelling value proposition to better serve our clients in the areas of people, risk and capital," said Willis Towers Watson CEO John Haley. "Going forward, our focus remains steadfast on our colleagues, our clients and our shareholders. We believe we are well-positioned to compete vigorously across our businesses around the world and will continue to introduce important innovations to the market. We appreciate and deeply respect all the Aon colleagues we got to know through this process."
In connection with the termination of the business combination agreement, Aon will pay the $1 billion termination fee to Willis Towers Watson, Willis Towers Watson's proposed scheme of arrangement has now lapsed, and both organizations will move forward independently. Both firms will provide further financial updates and outlooks on their respective Q2 2021 earnings calls, which take place on July 30 for Aon and August 3 for Willis Towers Watson.
Comments
“The change in the US administration has probably driven a major shift in the economic mindset and with it the actions of regulators. The move away from a monopolistic tolerant approach to the creating of greater market competition has inevitably had a role to play in the termination of the deal. It’s in a way a victory for competition and for business.
“Creating value from M&A needs to look beyond pure shareholder benefits. It must be the trigger for innovation, liberating talent, new ideas and products offering alternative solutions to the traditional markets.
“Risk managers had expressed concern about the value and potential impact that the merger would have created in terms of choice. Whether this changes now that the deal is not proceeding will be closely watched by the profession.
“We are in a dynamic global broking landscape that has evolved, in part, because of the proposed merger. We have seen new players, brokers investing in expanding their geographic footprint and the movement of talent between competitors. Greater competition and market disruption has no doubt created opportunities and Brokerslink has seen an expansion of its network and recognition of the importance of a truly independent global broking alternative.“
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