Flags of the EU fly in front of the headquarters of the European Commission in Brussels, Belgium, June 29, 2020. (Photo: Xinhua)

The EU's antitrust regulators will open a full-scale investigation into Aon's $30 billion bid for Willis Towers Watson to create the world's largest insurance broker, two people familiar with the matter said.

The all-stock deal, which would merge the world's second- and third-largest brokers, has attracted regulatory scrutiny due to concerns it would give the combined group increased pricing power.

A full probe by the EU's executive, the European Commission, would follow a preliminary review due to end on December 21. The commission declined to comment, as did Aon and Willis. A full-scale EU investigation usually takes about five months.

Aon did not provide concessions on Monday, the deadline for doing so in the preliminary phase to address EU competition concerns, the EU competition enforcer's website showed. The company's chief executive, Greg Case, said in March when the deal was announced that Aon was confident the deal would go through.

Aon's move on Willis, which would see it overtake Marsh & McLennan Companies Inc as the world's biggest broker, came just as financial markets were sliding as a result of the COVID-19 crisis.

The pandemic has caused a sharp rise in claims for insurers and hurt their investment portfolios, compounding existing challenges such as climate change. That's sparked a run of deals across the insurance industry as valuations have fallen and companies looked to shore up business models.

Aon and Willis put together insurance contracts for clients that involve a number of insurance providers, for anything from airlines to large sporting events.

Brokers also play a key deal-making role in the 330-year-old Lloyd's of London commercial insurance market, which carries out much of its business face-to-face and insures specialist risks such as oil rigs and soccer stars' legs.

This is Aon's second attempt at acquiring Willis Towers. It dropped an earlier bid last year after media reports broke the news.

The combined entity would work across the risk, retirement and health businesses. The deal will also allow the "new" Aon to offer clients services in areas such as cyber, intellectual property and climate risk, the companies' executives have said.