Infotech

Insurance: full investigation into Aon’s $ 30 billion transaction opens



Posted on Dec. 2020 at 20:55Updated 21 Dec. 2020 at 21:11

The European Commission wants to think twice before giving the green light to the birth of a global giant in the business insurance brokerage sector, ahead of the American Marsh & McLennan. On Monday evening, the Brussels institution announced the opening of an “in-depth investigation” to determine whether the takeover of Willis Towers Watson by Aon announced last March would not reduce competition in markets where the two groups are active .

Following an initial investigation, the European competition authorities say they have highlighted “ a number of areas of concern »In connection with the $ 30 billion merger of world numbers two and three in the sector, listed in the United States and operating in a multitude of countries.

Brussels fears that the operation could “Reduce choice and increase prices for European clients in the commercial risk insurance brokerage market”, said Margrethe Vestager, Commission Executive Vice President responsible for competition policy.

A broad spectrum of analysis

Whereas Aon and Willis Towers Watson are “Two of the very few brokers” able to provide a number of services ” on a multinational scale », The Commission is particularly concerned that the operation will reduce competition for large international groups.

It intends to focus on a wide spectrum of market segments, damage and liability insurance brokerage but also insurance brokerage on cyber risk, political risk, credit risk or offers for the maritime sector.

The Commission also says it fears that companies ” all sizes “Suffer from reduced competition for” risks related to space and aerospace manufacturing, as well as in some additional risk classes in certain national markets “.

At the same time, the institution intends to examine the markets for reinsurance brokerage services as well as services to companies providing advice and administration of pension, health and social protection schemes.

Verdict by next May

The Commission’s decision is a “Common step in the review process of a transaction of this size and complexity”, Aon said in a statement. The company domiciled in London ensures that it remains “ on track to complete the merger in the first half of 2021 ”, knowing thatthe activities of Aon and Willis Towser Watson, are “Complementary”.

The Commission has until May 10 to deliver its verdict. The vast majority of mergers notified to it are quickly authorized, but several transactions are currently the subject of an in-depth investigation by the commission, including the proposed acquisition of Chantiers de l’Atlantique by Fincantieri, yes that of GrandVision by EssilorLuxottica.

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