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

Defending itself in the courts against the United States Department of Justice’s objections to its proposed merger with rival insurance and reinsurance broker Willis Towers Watson (WTW), Aon has said that it would be “unacceptable” for its transaction to fail just because of a late trial date proposed by the DoJ.

A trial date of February 28th 2022 had been proposed to the court by the US DoJ, which would be almost two years after Aon’s acquisition of rival WTW was originally announced.

In a motion filed in the US District of Columbia court where the DoJ hearing is being held, Aon’s attorney’s explained that the end of February 2022 date is six months beyond the so-called “outside date” set in the original merger agreement, which was September 9th 2021.

That is the date the parties had originally agreed the deal needed to be completed by, so the US DoJ’s setting of a date for trial far beyond this is seen as a significant impediment to getting the merger agreed and underway.

As defendants, Aon and Willis Towers Watson (WTW) have requested a date of August 23rd as the latest a trial begins, to allow it to be completed before that outside date is reached.

The late February 2022 date is seen as “untenable” by the merger parties, while the motion also states that, “The possibility that a $30 billion transaction might fail due to unnecessary delays on the part of Plaintiff should be unacceptable to all.”

The parties state that typically a trial of this kind would be heard relatively quickly, within a couple of months at most.

Aon and WTW state that the US Department of Justice’s approach is “inefficient and impractical” and that waiting for a case management order to be agreed and approved before a schedule is set for the trial is only delaying the matter further.

They say that the proposed trial date of by August 23rd is “reasonable” and that the 18 months from merger announcement to the outside date should have been ample for the investigation and litigation of the transaction, if that was required.

So here, Aon and WTW appear to be insinuating that the DoJ has sat on its hands and not progressed the matter as quickly as it perhaps could have.

Of course, the US has had a Presidential election in that time frame, which can often delay matters and result in new leadership in departments such as antitrust. In fact, the Antitrust division still has an Acting Assistant Attorney General.

Aon and WTW state, “Defendants are eager to move forward with the deal and start bringing the benefits of this transaction to their clients. And each day that the transaction remains pending, Defendants are losing top talent—and their clients—to competitors, and clients are facing uncertainty as they consider which firm to use. Eight more months of uncertainty—as would be required under the Division’s proposed trial schedule—are unsustainable.”

They also insisted once again that, “This transaction will enhance competition by enabling the merged company to innovate better and help clients to mitigate risks that are presently underinsured or uninsurable, and generate significant annual cost savings.”

Whether the merger parties would extend their outside date in-line with the DoJ’s timeline, if it won’t budge, remains to be seen.

Abandoning the merger still seems unlikely, given how far the parties have come. But uncertainty is not helping, especially in staff morale and this could also read across to client comfort as well, if things continue to drag.

Also read:

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– 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.

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– 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.