Aon – Willis Towers Watson merger assessed by Singapore competition authority

The merger of insurance and reinsurance broking and consultancy giants Aon and Willis Towers Watson (WTW) continues to be looked at by watchdogs, with the Competition and Consumer Commission of Singapore the latest to assess the deal.

The Competition and Consumer Commission of Singapore has issued a consultation on the proposed merging of Aon with rival Willis Towers Watson, asking for feedback on the deal and saying it is assessing whether the deal would infringe section 54 of its Competition Act.

Competition watchdogs around the world have been analysing the deal and seeking feedback from interested parties, to identify whether it is believed the merger would result in a reduction in levels of competition in affected markets, including insurance and reinsurance broking.

With both Aon and Willis Towers Watson active in Singapore across broking and other segments of their businesses, it’s natural for the Competition and Consumer Commission of Singapore (CCCS) to seek this feedback.

The CCCS said that it has now received a notification from Aon for a decision on the proposed merger, so the consultation looks to establish whether the acquisition of Willis Towers Watson by Aon could result in a substantial lessening of competition within any market in Singapore.

Aon said that the proposed transaction will not result in a substantial lessening of competition in two markets it sees as relevant in Singapore,  which are the supply of retirement benefits consulting services in Singapore, or potentially regionally, and the global supply of human capital consulting services.

In these areas Aon and WTW have overlapping services, but Aon submits that the merger will not reduce competition in these markets.

It’s interesting that no mention of insurance or reinsurance broking is made in this case, while both companies do have broking operations in Singapore.

The CCCS does highlight that both Aon and WTW provide commercial or corporate risk broking and also reinsurance services in Singapore, so it seems the consultation would also welcome feedback on those areas of the pair of businesses.

As our sister publication Reinsurance News has previously reported, progress is reportedly being made on a remedy package proposal for European Commission regulators as the merger parties look to avoid a statement of objections.

A sale of Willis Re, the reinsurance broking unit, is said to be among the proposals and other reports suggest some commercial broking units such as WTW’s French operations under Gras Savoye are also among possible divestiture remedies.

There have also been reports that the US competition authorities may have concerns related to reinsurance.

As we’d reported before, we understand at least one potential buyer for Willis Re had already made itself known, while others are likely waiting for any formal process to begin, which some of our sources suggest could be anytime now, or even already be privately underway.

With the parties hoping to close this deal before the end of the first-half of 2021, we are now at the stage where they will have to engage with the various competition watchdogs from different countries, to seek approval and placate any concerns about their merger.

That means we’re getting close to crunch time for the deal, with objections or approval likely to be heard within weeks, unless this is going to drag on into H2.

Also read:

– 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.