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.