Aon to Sell US Retirement and Retiree Health Businesses in $1.4 Billion Deal

Aon is seeking regulatory approval from the US Department of Justice for its landmark merger with Willis Towers Watson by selling off its US retirement and retiree health insurance brokerage businesses in a $1.4 billion transaction.

The firm’s entire US retirement business will be sold to asset manager Aquiline, a $6.4 billion investment firm, and its Aon Retiree Health Exchange platform will be sold to business services provider Alight, Aon disclosed Thursday.

Included in the US retirement business sale to Aquiline is Aon’s core retirement consulting, pension administration, the US-based part of Aon’s international retirement consulting business, as well as various tools for defined benefit plans.

About 1,000 Aon employees will also switch over to Aquiline as a result of the transaction. Aon will retain its non-US actuarial, pension administration, and international retirement businesses.

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“The retirement solutions sector is benefitting from an increased focus on long-term investment security and risk management of plans,” Aquiline’s Chairman and CEO Jeff Greenberg said in a statement. “We look forward to working closely with the clients, management, and colleagues of Aon’s US retirement business to create further value for all stakeholders.”

Aon’s decision to divest parts of its business comes as it seeks to allay any challenges to its merger with Willis Towers Watson from the US DOJ, particularly across its operational jurisdictions.

“The agreements are intended to address certain questions raised by the US Department of Justice in relation to the combination with respect to the markets in which these businesses are active,” Aon disclosed.

Aon and Willis Towers Watson expect to complete an all-stock merger this September to form the world’s largest insurance broker, resulting in a $80 billion company.

But the size of the merger has spooked antitrust regulators at the US DOJ who worry that the pricing power will be uneven. The merger will mean Aon and Willis Towers Watson can overtake another firm, Marsh and McLennan, as the top global insurance broker.

Already, the two firms have divested of other parts of their businesses. In May, the companies divested of Willis Re, the broking reinsurance arm, to Arthur J. Gallagher and Co. in a $3.6 billion transaction. In April, Aon sold its retirement and investment business in Germany. In 2020, about $2.3 billion in revenue was divested of.

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