By: 10 March 2020
Aon and Willis Towers Watson to combine

The combination of Aon and Willis Towers Watson is back on, with the all-stock transaction set to create a giant in the insurance brokerage business worth approximately $80 billion (£61.22 billion).

News of Aon’s plans to acquire Willis Towers Watson leaked last year, but they were quickly shelved, reportedly due to regulatory requirements in certain jurisdictions, including Ireland.

The new deal to acquire Willis Towers Watson is valued at $30 billion (£22.97 billion). The combined company will be known as Aon, with its operating headquarters in London.

John Haley will take on the role of executive chairman with a focus on growth and innovation strategy. The combined firm will be led by Greg Case and Aon chief financial officer Christa Davies.

The transaction, subject to the approval of Aon and Willis Towers Watson shareholders, as well as regulators, is expected to close in the first half of 2021.

“The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk and capital,” said Haley, who is chief executive officer of Willis Towers Watson. “This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value.”

Aon chief executive officer Greg Case said: “This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors.”

“Our world-class expertise across risk, retirement and health will accelerate the creation of new solutions that more efficiently match capital with unmet client needs in high-growth areas like cyber, delegated investments, intellectual property, climate risk and health solutions.”

Commenting on the Aon-Willis Towers Watson combination, Simon Fitzsimmons, director of mergers and acquisitions (M&A) deal advisory at Mazars, said: “Another blockbuster deal in the global insurance broking market, seeing brokers ranked two and three combine together to become the largest global insurance broker, knocking Marsh off its current perch.”

“The UK Competition and Markets Authority (CMA) will no doubt deliberate on the transaction before giving its blessing (which also needs shareholder approval)—however, speculation already abounds that some of the combined divisions will need to be spun-off to appease the CMA as the market options for clients are compressed even further by this merger following that of Marsh and JLT only a year ago.”

“Further M&A opportunities from this deal will materialise either indirectly through chance spin-offs or directly as a result of the CMA decision, and with a predicted circa £1 billion of synergies, the ripples of this move will be felt throughout the market for some time to come.”