The Biden administration has sued to block the merger of two of the world’s largest insurance coverage brokers, asserting the deal may remove competitors, elevate costs and hamper innovation for US companies, employers and unions that use the businesses’ providers.
The Justice Department on Wednesday introduced the antitrust go well with filed in federal court docket in Washington searching for to cease AON’s proposed $30 billion acquisition of rival advantages and threat guide Willis Towers Watson.
Justice Department officers stated the proposed merger would convey collectively two of the “Big Three” international insurance coverage brokers — the third is Marsh McLennan — and remove competitors in 5 markets. They are property, casualty and monetary threat, well being advantages, actuarial providers for sure pension plans, retiree insurance coverage exchanges and reinsurance.
The corporations present steerage to many main US corporations on administering well being and retirement advantages, with the goal of retaining prices down by managing threat.
From the tone of their joint assertion Wednesday, the businesses appeared inclined to contest the federal government’s case. They stated the Justice Department’s motion “reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate.”
The two corporations stated that the mixture “will accelerate innovation on behalf of clients creating more choice in an already dynamic and competitive marketplace.”
In searching for separate approval for the merger from European Union authorities, the 2 corporations agreed to divest some of their property. But Justice Department officers stated Wednesday these wouldn’t be ample to defend US shoppers.
Both corporations are primarily based in London and integrated in Ireland. AON, with about $11 billion in income final year, has some 100 workplaces within the US. Willis Towers Watson, with round $9 billion in 2020 income, has 80 US workplaces.