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Aon’s $30 Billion Willis Towers Deal Challenged by Justice Department

U.S. regulators are challenging Aon's proposed $30 billion acquisition of Willis Towers Watson, arguing the insurance brokerage mega-deal is anticompetitive.

Aon's  (AON)  proposed $30 billion acquisition of Willis Towers Watson  (WLTW)  is being challenged by U.S. regulators, who argue the deal to create the world’s largest insurance brokerage is anticompetitive.

The Justice Department filed an antitrust lawsuit challenging Aon's proposed acquisition of Willis Towers, alleging the tie-up would lead to higher prices and reduced innovation for U.S. businesses, employers and unions.

“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” Attorney General Merrick Garland said in a statement.

The proposed deal, the largest for the industry, would combine the second- and third-largest brokers and would allow the new firm to overtake current market leader Marsh & McLennan.

“We disagree with the U.S. Department of Justice’s action, which reflects a lack of understanding of our business, the clients we serve and the marketplaces in which we operate,” Aon and Willis Towers said in a joint statement.

The case marks the first lawsuit by the Justice Department to stop a merger under the Biden administration, which has yet to nominate someone to take over the department’s antitrust division.

Announced in March 2020, a combined Aon and Willis Towers would create an insurance brokerage and services giant with annual revenue of more $20 billion, compared with Marsh & McLennan's $17.2 billion.

Shares of both companies tumbled on the news, with Aon shares ending the trading day Wednesday down 3.1%, the most since January. Willis Towers shares fell more than 7% to their lowest since late April. 

At last check, shares of Aon were down another 1.63% at $240.12, while shares of Willis Towers were down 0.34% at $236.33.