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Date of release: 14 July 2021
International merger involving AON and WTW approved with conditions
by Competition Tribunal
The Tribunal has approved the large merger, with conditions, in which Aon Plc (“Aon”) will acquire the business of Willis Towers Watson Public Limited Company (“Willis Towers”). Following implementation of this international transaction, Aon will exercise sole control over Willis Towers.
Merger parties
Aon and Willis Towers are active in the short-term insurance industry as short-term insurance and reinsurance brokers. Both firms provide non-life insurance broking and risk advisory services, including for commercial insurance, reinsurance, group health and welfare benefits, and retirement solutions. Both control several firms across the world, including in South Africa.
The merger parties also provide specialised broking and risk advisory services for specific sectors such as energy, mining and construction. As brokers, both Aon and Willis Towers act as intermediaries between the insurance companies (insurers) and customers seeking insurance for property and casualty risks across a number of specialities. They advise customers on their risk management requirements, helping them to determine the best means of managing risk and negotiating and placing insurance with various insurers through their global distribution network. As part of their risk advisory services offering, the merger parties assist customers in evaluating and managing risk exposures, structure their insurance programs, negotiate rates, terms and conditions. In addition, the parties provide data analytics services and complex claims advisory services for large corporate customers.
Competition concerns
Reinsurance broking market
Concerns had been raised by third parties contacted by the Commission during its investigation, that the transaction was likely to substantially prevent or lessen competition in the market for the provision of treaty reinsurance broking services in South Africa (treaty reinsurance contracts cover entire insurance portfolios and an insurer transfers all risks within a book of business to the reinsurer broker)  i.e., the merger would remove an effective competitor and raise the level of concentration in an already concentrated market. The proposed merger would therefore effectively be a 3-to-2 merger, such that post-merger, the merged entity would be unlikely to face significant competitive constraint from other firms in the market. Thus, the merged entity would likely be able to exercise market power in the reinsurance market post-merger.
Short-term insurance broking market
Concerns were also raised by third parties that the merger would result in a structural change in the market for corporate short-term insurance broking services and would result in the removal of an effective competitor in this market. In addition, it would be unlikely that the merged entity would face significant competitive constraint from other firms in the corporate short-term insurance broking market.
Merger conditions
The Tribunal approved the merger subject to the following conditions, which it concluded, would address the competition concerns identified:
For reinsurance broking services, the merger parties will divest Willis Towers’ entire global reinsurance broking business units dedicated to treaty and facultative reinsurance services, (the Reinsurance Divestiture Business) to Gallagher (facultative reinsurance contracts cover just a single risk – a reinsurer performs its own underwriting for some or all of the policies to be reinsured and each policy is considered a single transaction). This will essentially facilitate Gallagher’s entry into the reinsurance broking services market in South Africa. Gallagher is currently not directly active in this market in South Africa but is a global competitor to the merger parties and Guy Carpenter. Thus the multinational and larger corporate customers would continue to have access to three global reinsurance brokers, post-merger.
In addition, the merger parties will divest the entire Willis Towers short-term insurance broking services in South Africa (“South African CRB Divestiture Business”) to Gallagher which will remove the overlap between Aon and Willis in South Africa. Gallagher, the identified purchaser, will receive all assets used in Willis Towers’ South Africa short-term corporate and commercial insurance broking business. Further, the merger parties have committed not to compete with the Divested Businesses, both the Reinsurance Divestiture Business and the South African CRB Divestiture Business; for a specific period following the merger’s approval; as well as not to solicit the Divested Businesses’ customers or employees for a specified period.
The Tribunal concluded that the merger was unlikely to negatively impact on employment as it will not result in job losses. In addition, the transaction does not raise any other public interest concerns.
The Tribunal's order (including the detailed list of merger conditions) is available on the Tribunal’s website at
Issued by:

Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
Twitter: @comptrib
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