Aon Plc’s decision to abandon a $30 billion takeover of insurance brokerage Willis Towers Watson Plc after Justice Department pushback was the first deal worth more than $10 billion that fell apart for regulatory reasons since the Biden administration announced tougher stances on large consolidation. The DOJ was concerned that the deal would have consolidated the insurance brokering industry from three big competitors to two. So what does this mean for big deals moving forward? Antitrust experts weigh in.
“We’re seeing the Biden administration look increasingly closely at transactions, which has a timing impact on deals,” says Meghan Rissmiller, a partner in Freshfields’ antitrust, competition and trade practice. “Greater scrutiny is resulting in longer and more in-depth investigations. This applies at both U.S. antitrust agencies, the Federal Trade Commission and Department of Justice Antitrust Division.”
“Recent developments shouldn’t be surprising as it relates to regulatory scrutiny of deals—particularly larger deals where there is perceived market concentration,” says Thaddeus Malik, chair of global M&A practice at Paul Hastings. “Regulatory developments often follow a predictable path. An expectation arises, as it did after the election, then official pronouncements are made, as illustrated by the recent presidential order. Then specific actions manifest themselves, as has happened with some recent deals being questioned, with some being abandoned.”
Are you working any large deals that are under extended antitrust review and may not close? Tell me about it. E-mail me at: [email protected].
– Demitri Diakantonis