The European Commission is to deepen its investigation of the $30bn Aon-Willis merger deal. The Commission has until May 2021 to finalize its decision on the merger.
The all-share deal worth $29.9bn (£22.5bn) was first revealed in March 2020. If approved it would create the world’s biggest broker firm with a combined equity value of $80bn.
Aon mentioned at the time that the deal is anticipated to make $800m in pre-tax synergies and generate $10bn in shareholder value.
The EC previously a ’phase I’ probe under article 6 (1) (c) of the EU Merger Regulation due to “several concerns about the supply of commercial brokerage services especially to large multi-national customers, who depend on brokers with a high level of expertise and a global presence”.
The Commission was that the deal could negatively affect competition in the following areas:
- Brokerage services to large multi-national customers in the risk classes property & casualty, financial and professional services, credit and political risk, cyber and marine;
- Brokerage services to customers of all sizes for space and aerospace manufacturing risks as well as in a few additional risk classes in specific national markets.
It said the two brokers were only a few businesses that could offer these services on a multi-national scale.
The EC will at the same time look into the companies’ reinsurance, as well as ”the provision of consulting and administration services to companies regarding the retirement, health and welfare schemes offered to their employees”, it said.
EC competition policy executive Margrethe Vestager commented on the investigation, “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.”