BRUSSELS – Aon is facing a list of objections from the EU’s antitrust watchdog that he must overcome with concessions to continue his $ 30 billion bid on Willis Towers Watson, two people familiar with the matter said.
The negotiations could jeopardize Aon’s goal of concluding the deal in the first half of the year, unless it offers concessions in the coming weeks to ward off the charge sheet, the people said.
The agreement, announced a year ago, will create the largest insurance broker in the world and the merging entity the world’s number 1 Marsh & McLennan Cos Inc.
The insurance industry has seen a wave of consolidation caused by declining valuations, companies looking to strengthen their business models, rising COVID-19 related claims and other challenges such as climate change.
The European Commission, which last month suspended its investigation into the deal while waiting on Aon to provide requested information, is concerned that the takeover could raise prices and stifle innovation.
The EU enforcer and Aon declined to comment.
Aon shares extended losses and fell by 0.5% while Willis earlier wiped out gains and was 0.6% lower by 1655 GMT.
The people are drafting a statement of objections, a charge sheet in which possible competitive harm is inflicted.
Companies have about two weeks to respond and can request a closed-door hearing.
Aon can fend off the charge sheet by offering concessions to address the concerns of EU regulators. The people have been in informal discussions about concessions, but to date have not made an official offer.
The EU enforcer wants the reinsurance business of Willis to be sold, which Aon refused, and he also looks at whether the companies might sell the global coordination of mediation and consulting services to employees, another person with direct knowledge of the case. said.
The person who has received several such documents will not be easy to find the right concessions that will satisfy large multinational clients, an important focal point of the Commission’s questionnaires sent to competitors and customers.
‘To merge a fourth contestant or third contestant, they must replace Willis. Replacing Willis means replacing Willis’ footprints, their skills in data analysis, cross-risk capability. These are very expensive, difficult things to build, ”the person said.
The agreement also raised concerns with the Australian antitrust watchdog, which said last month that it could significantly hamper competition in commercial risks, reinsurance and mediation and advisory services for employees in Australia.
(Reporting by Foo Yun Chee; Edited by Jan Harvey and Elaine Hardcastle)
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