The U.S. Justice Department sued to block
The department’s antitrust division filed a lawsuit in federal court in Washington Wednesday asking a judge to stop the deal, arguing that it would create too much concentration in the market and hurt businesses, their employees and retirees.
“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” Attorney General
Shares of both companies tumbled on the news. Aon shares closed down 3.1%, the most since January. Willis shares fell more than 7% to the lowest point since late April.
Brokerages, which help connect businesses looking for coverage with insurers, have been aggressively merging to diversify, boost commissions and serve customers who increasingly want to deal with fewer intermediaries.
The case marks the first lawsuit by the Justice Department to stop a merger under the Biden administration, which has yet to nominate someone to take over the department’s antitrust division. On Tuesday, he named
Aon and Willis Towers said in a statement they remain committed to the merger and are making “material progress” with other regulators reviewing the deal
“We disagree with the U.S. Department of Justice’s action, which reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate,” they said.
In 2019, Aon
The Justice Department said the deal would turn the “Big Three” insurance brokers into the “Big Two,” giving the company pricing power over companies.
“Aon likely would use that leverage against American businesses,” the complaint said. “Businesses likely would pay the price in the form of higher fees for lower-quality services for the management of their most complex and expensive commercial risks through insurance and reinsurance.”
Aon and Willis have
(Updates with DOJ comment in third paragraph)
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