The UK’s Competition and Markets Authority (CMA) said today that it is investigating the anticipated acquisition of the Treaty Reinsurance business of Willis Towers Watson by Arthur J. Gallagher & Co.
In a brief statement, which says the probe was launched yesterday with the notification of all parties, CMA also said that it opened a comment period that runs through Oct. 19.
The CMA is considering whether the $3.25 billion deal, “if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Gallagher’s deal announcement in mid-August came after Willis and rival Aon Plc called off their $30 billion merger that would have created the world’s largest insurance broker following opposition from the U.S. Department of Justice.
As part of approving the Willis-Aon merger, European regulators had demanded the sale of Willis Re, the broker’s reinsurance arm, to preserve competition, and Gallagher had agreed to buy it and other assets for about $3.6 billion.
Terms of the latest agreement for Gallagher to buy Willis Re include a potential additional consideration of $750 million. It is expected to close in the fourth quarter.
The CMA, in its announcement today, has set a deadline of Nov. 29 for its “phase 1 decision,” explaining that this date is “the current statutory deadline by when the decision will be announced.” There is, however, no guarantee that the decision will be announced on or before this deadline, as the deadline of a given case may change during the merger assessment process due to a variety of different reasons, CMA said.