Aon and Willis Towers Watson are abandoning their $30 billion merger plan, terminating an agreement that could have made the combined company the world's largest insurance broker.
Announced in March 2020, the merger hit trouble last month when the U.S. Department of Justice sued to block it, saying the buyout would reduce competition and lead to higher prices.
The companies said they would end their litigation with the U.S. Department of Justice, and Aon would pay $1 billion in termination fee to Willis.
At the time of the DOJ lawsuit announcement, both companies said they were "fully committed" to their mega-merger, despite the news that the U.S. Department of Justice is suing to block it.
The Biden administration claimed the deal could eliminate competition, raise prices and hamper innovation for U.S. businesses, employers and unions that use the companies’ services.
The Justice Department filed the antitrust suit in federal court in Washington.
The proposed merger was to bring together two of the “Big Three” global insurance brokers — the third is Marsh & McLennon — and eliminate competition in five markets, Justice Department officials said.
Aon and Willis Towers Watson agreed to divest some of its assets in a bid for a separate approval for the merger from European Union authorities. But Justice Department officials said Wednesday those would not be sufficient to protect U.S. consumers.