European Commission (EC) has launched a 5months Phase II competition investigation before it will approve or reject the proposed $30bn Aon acquisition of Willis Towers Watson (WTW),
The broker said it expected a full competition review of the deal, and believes its current completion schedule for the first half of 2021 will be met. The EC has until 10 May to deliver its verdict.
Opening the in-depth probe, EC competition commissioner Margrethe Vestager said the investigation will “assess carefully whether the transaction could lead to negative effects for competition, less choice and higher prices for European customers in the commercial risk brokerage market”.
The EC’s initial review raised several concerns and the EC said it could not approve the merger without further investigation.
The EC said it is concerned that bringing the two brokers together “could significantly reduce competition” in commercial broking, reinsurance broking and retirement services for commercial clients.
In an initial market probe, the EC identified a number of concerns, particularly when it comes to the supply of commercial broking services to large multinational clients that depend on high-level expertise.
It said multinational broking services for P&C, financial and professional services, credit and political, cyber and marine risks would be most affected by combining Aon and WTW.
It added that the broking services to commercial clients of all sizes for aerospace manufacturing risks could also be negatively impacted.
“Aon and Willis Towers Watson are two of the very few brokers that are able to provide these services on a multinational scale,” the EC said. It noted that Aon and WTW did not submit commitments during the initial investigation, which closed yesterday, to address the EC’s preliminary concerns.
Aon said: “The Phase II review is a common next step in the review process for a transaction of this size and complexity under the EU Merger Regulation, and the firm remains on track to close the combination in the first half of 2021.”
But it is confident about a positive outcome from the review and will work with the EC during the process.
The Aon/WTW deal was announced in March this year and was approved by shareholders of both firms in August.