The US Department of Justice (DoJ) has filed a civil antitrust lawsuit to block Aon’s proposed $30bn (£21.5bn) acquisition of Willis Towers Watson (WTW).

As reported by our sister title, Pensions Age, the DoJ stated that the merger of two of the ‘big three’ global insurance brokers would create a broking “behemoth”, threaten to eliminate competition, raise prices and reduce innovation for American businesses, employers and unions that rely on these services.

These reasons for blocking the merger were presented in the complaint filed in the US District Court for the District of Columbia.

The deal was agreed between Aon and WTW in March 2020 and would create a combined equity value of around $80bn (£57.2bn).

However, the complaint warned that the merged firms could used "increased leverage" to raise prices and reduce the quality of products.

Although the DoJ acknowledged that the firms have agreed to certain divestures in connection with various investigations by international competition agencies, the complaint alleged that these remedies were "inadequate" to protect consumers in the US.

It also alleged that the divestures in the US health benefits and commercial risk broking were "wholly insufficient" to resolve the department's concerns.

“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,” said Attorney General, Merrick B. Garland.

“American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting.

"Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”

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