Willis Towers Watson shareholders will receive 1.08 Aon shares for every Willis Towers Watson share they own. That values Willis Towers Watson’s equity at almost US$30 billion, a 16.2% premium to Friday’s closing price.

By Ian Horswill


Posted on March 10, 2020

The world’s second biggest insurance broker Aon has swallowed up the world’s third biggest insurance broker Willis Towers Watson for almost US$30 billion in stock in the biggest mergers and acquisitions deal of the year to date.

Aon and Willis Towers Watson have a total revenue of more than $20 billion. Aon, which has its headquarters in London, England, said the combination of the two insurance brokers will create savings of US$800 million, AON said in a statement.

Willis Towers Watson shareholders will receive 1.08 Aon shares for every Willis Towers Watson share they own. That values Willis Towers Watson’s equity at almost US$30 billion, a 16.2% premium to Friday’s closing price.

“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.”

Willis Towers Watson CEO John Haley said: “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.

“This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value.”

Aon’s takeover of Willis Towers Watson is the latest development in the consolidation of the insurance broking industry. Marsh & McLennan, which until now has been the world’s number one insurance broker by revenue, bought Jardine Lloyd Thompson in a £4.3 billion tie-up. Marsh & McLennan has revenue just below US$17 billion. The new number three, Arthur J Gallagher, has revenue of US$5 billion. 

Willis Towers Watson, which operates in more than 140 countries and employs over 45,000 people, was itself the result of a merger between Willis and Towers Watson in 2015.

Three quarters of the savings will come from the “consolidation of business and central support functions” with the rest coming from technology and real estate. The two businesses’ headquarters are metres away from each other in London.

Aon, which was created in 1982 when the Ryan Insurance Group merged with the Combined Insurance Company of America and renamed the company Aon in 1987, said that the deal would be accretive to adjusted earnings per share in the first full year after the acquisition.