Aon is to acquire Willis Towers Watson in an all-share deal that will create the world’s largest insurance broker.
Subject to approval, the new company will have a combined equity value of around $80 billion (£62 billion), larger than US giant Marsh & McLennan.
“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 Willis Towers Watson chief executive John Haley. “This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value.”
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” – John Haley, Willis Towers Watson
In a joint statement the companies said the deal combines two highly complementary businesses into a technology-enabled global platform that is more relevant and responsive to clients’ needs.
“This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors,” said Aon chief executive Greg Case.
“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.”
The new firm’s combined management teams have considerable experience with the integration of large, complex transactions. The combined company will be named Aon, and will be a global professional services firm focused on the areas of risk, retirement and health.
It will maintain its headquarters in London. Haley will become executive chairman with a focus on growth and innovation, but will be led by Greg Case and Aon chief financial officer Christa Davies. The board will comprise members from Aon and Willis Towers Watson’s current executive teams.
Aon anticipates that the transaction will provide annual pre-tax synergies and cost reductions of $800m (£615m) by the third full year of combination, allowing the firm to invest further in innovation.
The transaction is subject to regulatory approval aas well as the approval of the shareholders of both Willis Towers Watson and Aon Ireland. Aon incorporated in Dublin last year citing Brexit as the reason. Aon and Willis Towers Watson expect the transaction to be completed early next year.