July 26, 2021 | Insurance | North America | Ended

Willis Towers Watson / Aon: US Antitrust Catalysts: Settlement, Trial or Termination

On 16-Jun-21, the Department of Justice (DoJ) filed a civil antitrust lawsuit to block Willis Towers Watson / Aon, one of the world’s largest pending public mergers. The DoJ’s move is the culmination of a 14-month period of dissatisfaction with the remedies proposed, but the merger parties believe the complaint reflects the DoJ’s lack of understanding of insurance brokerage and overlooks the material progress made with other global regulators. Willis Towers Watson and Aon have offered to divest assets spanning US commercial risk broking and health benefits broking segments, but these appear unable to allay the DoJ’s concerns. In this report, we provide an update on where the deal stands on US antitrust, and we assess the likelihood of upcoming catalysts that could determine the outcome: settlement (consent decree), trial or termination. Our research considers quantitative and qualitative aspects of remedies offered and the merger parties’ appetite to offer more. We outline what has been accepted by regulators in Europe, Australia, and New Zealand and provide analysis of case studies of US court precedents to conclude the probability of each catalyst and the appropriateness of current trading levels.

1. Situation Overview and the Horizontal Issues 2. DoJ Lawsuit: The Complaint and Concerns 3. Global Divestitures Offered and Ex-US Antitrust Remedies 4. Settlement Likelihood and the Confusion at the DoJ 5. Court Likelihood and Burden of Proof Required 6. Termination Likelihood and Divestment Cap Breaches 7. Our Views Based on Precedent Trading and Cases Appendix. Pre-Trial Schedule of Events

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