EC Pauses Investigation; CEO Says Aon-Willis Merger Still on Track to Close in 1st Half

The merger of Aon with Willis Towers Watson is on course to close in the first half of 2021, said John Haley, Willis Towers Watson’s chief executive.

“In March of last year when we first announced [the merger], we had said we expected to close in the first half of 2021,,” said Haley during a Feb. 9 analysts’ call to announce the broker’s 2020 earnings. “That’s because this is a complex process as filings are required around the world. We are still on course to close in the first half of 2021. We still expect to meet that deadline.”

The two brokers are still awaiting the outcome of the European Commission’s antitrust review of the proposed $30 billion deal.

During the analysts’ call, Haley said nothing has happened to indicate a change in the time frame for the merger.

However, the European Commission revealed on Feb. 8, it stopped the clock in its in-depth investigation into the proposed combination of Aon and Willis Tower Watson. “This procedure in merger investigations is activated if the parties fail to provide, in a timely fashion, an important piece of information that the Commission has requested from them,” said a commission spokesperson.

“To comply with merger deadlines, parties must supply the necessary information for the investigation in a timely fashion. Failure to do so will lead the commission to stop the clock. Once the missing information is supplied by the parties, the clock is re-started and the deadline for the Commission’s decision is then adjusted accordingly,” the spokesperson added.

The full-scale EC investigation was originally to be completed by May 10, 2021, according to the EC.

Aon and Willis Towers Watson both declined to comment on the commission’s pause.

During the analysts’ call, Hayley said, after the regulatory approvals are received, the key then will be to focus on making sure “the integration happens correctly and that we hit the ground running — both on day one and in the time immediately after that.”

“We’ve had very good teams working on that,” Haley continued, noting that the recent announcement of the top structure and the top positions on the executive committee was an important milestone. “We just need folks to continue to be focused on making sure we design the company as best we can for success in the future.”

WTW announced revenue of $2.76 billion for the fourth quarter of 2020, an increase of 3% (1% increase constant currency and 2% increase organic), compared to $2.69 billion for the same period in the prior year. For the year ended Dec. 31, 2020, revenue was $9.35 billion, an increase of 3% (4% increase constant currency and 2% increase organic), compared to $9.04 billion for the same period in the prior year.

Income from operations for the fourth quarter of 2020 was $587 million, or 21.2% of revenue, a decrease of 430 basis points, compared to $687 million reported for the same period in the prior year. For the year ended Dec. 31, 2020, income from operations was $1.2 billion, or 12.6% of revenue, a decrease of 210 basis points, compared to $1.3 billion reported for 2019.