March 9, 2020 by Jason Contant
Global brokerage Aon plc announced Monday it intends to acquire Willis Towers Watson for reportedly nearly $30 billion in an all-stock transaction.
“This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors,” said Aon CEO 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.”
Subject to regulatory and shareholder approvals and other customary closing conditions, the definitive agreement will create a combined equity company value of approximately $80 billion “before anticipated creation of over $10 billion of expected shareholder value,” Aon said in a statement. After completion of the transaction, which is expected to close during the first half of 2021, the firm will go to market under the Aon brand.
For the full-year 2019, Aon had a total revenue of $11 billion and Willis Towers Watson had $9.1 billion in total revenue last year.
The combined firm will be led by Aon CEO Greg Case and Aon chief financial officer Christa Davies, “along with a highly experienced and proven leadership team that reflects the complementary strengths and capabilities of both organizations,” Aon reported. The board of directors would comprise proportional representation from Aon and Willis Towers Watson’s current directors. John Haley, CEO of Willis Towers Watson, will take on the role of executive chairman with a focus on growth and innovation strategy.
Aon would maintain operating headquarters in London, U.K. Aon shareholders would own approximately 63% of Aon and Willis Towers Watson shareholders would own approximately 37%.
Aon anticipates the transaction will provide cost reductions of $800 million by the third full year of combination (approximately 73% from the consolidation of business and central support functions, including leveraging the capabilities of the Aon Business Services operational platform across the combined group, and 27% from the consolidation of infrastructure related to technology, real estate and third-party contracts).