Aon – Willis offered earlier US trial, but still past merger outside date

Insurance and reinsurance broking giants Aon and Willis Towers Watson (WTW) have now been granted an earlier date for the antitrust trial against the United States Department of Justice, which has objected to the proposed merger, with a November 18th start now proposed, but seemingly with no guarantees it doesn’t slip.

Previously, a trial date of February 28th 2022 had been proposed to the court by the US Department of Justice, which the merger parties had deemed “unacceptable” and a threat to the completion of the deal as it fell well-beyond the outside date set for completing Aon’s acquisition of insurance and reinsurance broking rival Willis Towers Watson.

However, the new start date set for the trial by Judge Reggie Walton is for November 18th, which still falls beyond the outside date.

The Judge also said that while initial trial proceedings would be held then, he wouldn’t expect to hear the remaining proceedings until December.

As a result, it looks like the trial could easily drag into 2022, which is far outside of Aon and Willis Towers Watson’s (WTW) initial timeline for the completion of their merger.

The Judge also warned that these dates could even be pushed back, as his caseload is currently so high, meaning there appear to be no guarantees for Aon and WTW on when the US Department of Justice trial would begin, or potentially complete.

The Judge said it was not practical to believe a trial could begin sooner, given the preliminary work required by the DoJ to prepare for the case.

The current so-called “outside date” set in the original merger agreement is September 9th 2021, after which WTW can break the merger agreement and also collect on a termination fee of $1 billion.

An extension of this date is possible, as long as both sides agree.

But the insurance and reinsurance businesses of both of the merger parties have suffered from an exodus of staff and the parties will be keen to gain some certainty over the chances of actually completing the deal as well.

It’s also worth considering the divestments that are planned.

With major divestitures, such as the majority of reinsurance broker Willis Re, along with a range of corporate risk broking units set to be sold to Gallagher, as well as others, the timeline for those acquisitions would also likely have to slip further to beyond the completion of the trial.

It seems likely Gallagher and the other buyers would want to hold on for that opportunity, to greatly expand their businesses, but there are no guarantees of course.

A late trial date is seen as a significant threat to the merger by Aon and WTW it seems.

So it will be interesting to see if any statement on a commitment to the merger, or otherwise, is forthcoming from the parties involved.

Also read:

– Failure of WTW merger over US DoJ trial date “unacceptable” – Aon.

– South Africa adds to Aon Willis merger divestiture load.

– Aon – Willis Towers Watson merger review by Singapore to deepen.

– Aon & WTW “surprised” by DoJ lawsuit. Gallagher ready to snap up divestitures.

– Divestitures more likely than Aon abandoning Willis deal: Analysts.

– US DOJ sues, says Aon Willis would be “broking behemoth”, parties disagree.

– Aon selling $1.4bn of US retirement units to address US DOJ merger questions.

– US DOJ may not challenge Aon / Willis Towers Watson merger: Report.

– Aon / WTW: Willis Re sale supported, as industry wants broker choice.

– Aon sells German pensions business to LCP, as further step towards WTW merger.

– Aon & WTW agree $3.57bn sale of assets to Gallagher, including Willis Re.

– Gallagher likely buyer of $3bn Aon – Willis (WTW) divestments: Report.

– Aon expected to get conditional WTW acquisition approval from EC: Reuters.

– EC asks for feedback on sale of Aon / WTW assets, as MMC gains talent.

– Aon in proactive offer to US DOJ on Willis Towers Watson merger: Report.

– Aon – Willis Towers Watson divestiture reports expand to US & Bermuda.

– EC extends Aon – Willis Towers Watson merger deadline again.

– Aon – Willis Towers Watson merger deadline pushed back by EC.

– Aon – Willis Towers Watson merger assessed by Singapore competition authority.

– Aon & Willis Towers Watson merger may face EC statement of objection: Reuters.

– Aon & Willis Towers Watson merger to “significantly lessen competition”.

– Aon & WTW cite alt. capital, disintermediation & marketplaces in defence of merger.

– Aon & Willis Towers Watson reveal leadership of combined company.

– Willis Re divestment seen necessary for Aon – WTW merger to complete.

– If Aon / WTW leads to divestitures, AJG seen as “best fit” for Willis Re: KBW.

– EC investigates Aon / WTW deal, cites competition “concerns”.

– Aon + WTW to “extend proven model of catastrophe bonds” – CEO’s Case & Haley.

– Aon & Willis Towers Watson to merge.