Aon and Willis Towers Watson have agreed to terminate their proposed merger in response to anti-competition concerns in the US.
Termination of the merger, which was first announced in March 2020, also ends anti-competition litigation brought in the US.
The combined company would have created the world’s largest insurance broker, worth $30 billion (£21.76 billion). But the US Department of Justice (DOJ) filed a lawsuit last month to block the deal, claiming it would “eliminate substantial head-to-head competition and likely lead to higher prices and less innovation”.
Aon will pay a $1 billion termination fee to Willis Towers Watson in connection with the collapse of the merger.
In a statement, Greg Case, chief executive officer at Aon, said: “Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the US Department of Justice.”
“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.”
John Haley, chief executive officer at Willis Towers Watson, said: “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.”
“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.”