The European Commission has opened an in-depth investigation into the proposed acquisition of Willis Towers Watson by Aon over competition concerns.
The Commission is especially concerned the transaction may reduce competition in the provision of brokerage services to large multi-national companies in the risk classes such as property and casualty, financial and professional services, and credit and political risk.
It also singled out brokerage services for space and aerospace manufacturing risks as an area of concern.
However, it indicated it would also examine the market for pension consulting and administration services and that for services to companies regarding workplace health and welfare schemes.
Executive vice-president Margrethe Vestager, responsible for competition policy, said: “Aon and Willis Towers Watson are two leading companies in the market for insurance and re-insurance brokerage. They help companies with their risk management and with finding the right insurers for their needs.
“We have opened an in-depth investigation to assess carefully whether the transaction could lead to negative effects for competition, less choice and higher prices for European customers in the commercial risk brokerage market.”
According to the Commission, both Aon and Willis Towers Watson had decided not to submit commitments during the initial investigation to address the Commission’s preliminary concerns. In-depth investigations of notified mergers are known as Phase II investigations.
Shareholders of the two consultancies approved their combination at general meetings in August.
Aon today said it had expected a thorough review of the two firms’ combination and that the Phase II review was a common next step in the Commission’s review process for transaction of a certain size and complexity. It remained on track to close the deal in the first half of 2021, it said.
”As stated previously, Aon’s and Willis Towers Watson’s businesses are complementary, operating across broad, very competitive areas of the economy, and Aon remains confident of a positive outcome without any divestitures,” said Aon.
The Commission has until 10 May 2021 to make a decision about the transaction.
In the UK, a competition review of the investment consultancy and fiduciary management sectors led to the introduction of mandatory tendering rules in 2019.