Insurance Broker Aon Strikes $30bn Takeover Deal

Aon Plc
agreed to buy Willis Towers Watson Plc in an almost $30 billion transaction
that combines the world’s second- and third-biggest insurance brokerages.

The
all-stock deal, the largest ever for the industry, comes almost exactly a year
after previous talks between the two companies broke down. Aon Chief Executive
Officer Greg Case and Chief Financial Officer Christa Davies will lead the
combined company, according to a statement Monday.

Brokerages, which help connect businesses looking for coverage with insurers, have been aggressively merging to diversify, boost commissions and serve customers who increasingly want to deal with fewer intermediaries. Marsh & McLennan Cos. the largest broker, bought Jardine Lloyd Thompson Group Plc last year for $5.7 billion. Willis Towers was itself formed in 2016 in an $8.9 billion merger.

Eary stage talks

The
Aon deal “combines two highly complementary businesses into a
technology-enabled global platform that is more relevant and responsive to
client needs,” the companies said in the statement.

Both brokerages have fingerprints in Chicago, with two of the city’s tallest structures bearing their names. Aon still maintains U.S. operations at Aon Center, 200 E. Randolph St., after moving its global headquarters to London in 2012, while Willis – then known as Willis Group Holdings – obtained the naming rights to the former Sears Tower at 233 S Wacker Drive in 2009 and leased a portion of space in the building.

Under
the deal, Willis Towers investors will receive 1.08 Aon shares for each of
their shares, with existing Aon investors owning about 63% of the company once
the deal is completed. Willis Towers Watson shareholders will get about $231.99
a share in stock. That’s 16% higher than the company’s closing price on Friday.

Last
year, Aon and Willis Towers Watson pulled the plug on a proposed combination less
than 24 hours after preliminary talks leaked. A Bloomberg News report thrust
the discussions into the public, making it difficult for Aon to move forward
because it was still refining the terms of its offer, people familiar with the
matter said at the time.

Irish regulations forced the disclosure of early-stage talks last year. Aon said at the time that it reserved the right within 12 months to set aside its announcement that it wasn’t intending to pursue a deal. While Aon was restricted from reaching out to Willis for at least a year, Willis was free to approach its pursuer, according to a person familiar with the matter. [ dailyherald.com ]

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