Today, Aon and Willis Towers Watson announced that the firms have agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice. In connection with the termination of the business combination agreement, Aon will pay a $1 billion termination fee to Willis Towers Watson.

The $30 billion deal was first announced in March 2020 but faced numerous roadblocks to satisfy regulatory requirements. Despite the deal gaining EU regulatory approval based on a series of divestures, the DOJ filed a lawsuit in June aimed at stopping the mega merger because it would reduce competition and could lead to higher prices.

In May, the merger had previously taken a giant step forward after Willis Towers Watson agreed to sell Willis Re and other assets to Arthur J. Gallagher & Co for $3.57 billion, a deal which is now uncertain to go ahead. Both Aon and Willis Towers Watson had previously said that “all of the announced regulatory divestitures are contingent on the completion of the pending Aon and Willis Towers Watson combination, as well as other customary closing conditions.”

“Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice," said Greg Case, CEO of Aon. "The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point."

"Over the last 16 months, our colleagues have turned potential challenges into opportunities to advance our Aon United strategy," Case added. “We built on our track record of innovation, continued to deliver industry-leading performance and progress against our key financial metrics and move forward with the strongest colleague engagement and client feedback scores in over a decade. Our respect for Willis Towers Watson and the team members we've come to know through this process has only grown."

"Our team's resilience and commitment are a source of pride and confidence," said John Haley, CEO of Willis Towers Watson. “They have continued to bring to life Willis Towers Watson's compelling value proposition to better serve our clients in the areas of people, risk and capital. Going forward, our focus remains steadfast on our colleagues, our clients and our shareholders. We believe we are well-positioned to compete vigorously across our businesses around the world and will continue to introduce important innovations to the market. We appreciate and deeply respect all the Aon colleagues we got to know through this process."

Will Jones is IA editor-in-chief.