Aon/Willis Towers Watson: Brokerage to Divest Retirement Consulting, Exchange Businesses

Published on Jun 03, 2021

Aon (AON) in a statement today said it would divest for $1.4 billion its U.S. retirement consulting and retiree health exchange businesses to two separate buyers, responding to DOJ antitrust concerns about the insurance brokerage’s proposed $30 billion buyout of rival Willis Towers Watson (WLTW).

Under the agreements, Aon would sell its U.S. retirement consulting arm to private-equity firm Aquiline Capital Partners and its Aon Retiree Health Exchange business to benefits services provider Alight Solutions.

The divested assets would include two areas that have raised antitrust concerns among DOJ staff investigating Aon’s planned acquisition of Willis—pension actuarial and retirement exchange services.

Aon’s announcement occurs as it engages in settlement talks with DOJ staff, which has been reviewing the deal for over 14 months. The brokerage intends the proposed divestitures to address “certain questions” DOJ has raised about the Willis transaction, Aon said.

“These agreements further accelerate our momentum to close our proposed combination with Willis Towers Watson,” Aon CEO Greg Case said in the statement.

European Commission chief Margrethe Vestager supports a separate, earlier Aon divestiture offer geared toward addressing the companies’ insurance and reinsurance broking overlaps, signaling likely EC approval of the Willis deal.

But sources have said DOJ still hasn’t indicated how it will ultimately proceed. DOJ has adopted a dual-track approach, seriously considering the package the EC favors, while recently stepping up trial preparations in case the department decides to sue to block the deal.

With the new proposal added to the existing divestiture package, Aon said it plans to sell assets that generate $2.3 billion in annual revenue. That amount is above the merger agreement’s requirement that Aon divest assets generating revenue of up to $1.8 billion if necessary to secure regulatory clearances.

Under the new proposal, Aon would divest to Aquiline a retirement consulting and pension administration business with 1,000 employees. Included in the assets would be Aon’s pension

actuarial capabilities, a small niche that involves monitoring the design, operations, investments and funding levels for a company’s pension plan and liabilities.

Aon would divest to Alight its business that runs private health benefits exchanges for companies’ retirees.