Irish-domiciled insurance broker Aon Plc will be acquiring an also Irish-domiciled insurance broker Willis Towers Watson Plc. (Willis) in what has been set to become as the world’s biggest insurance merger ever. The merger talks started around January of 2019 and proceeded in an on-and-off tempo. Exploratory talks first started on January 30, 2019. The merger is set to be completed and closed by mid-2021. Aon will be the surviving entity. The $30 billion, all-stock acquisition merges two of the world’s leading brokers. Aon and Willis are the second and third largest insurance brokers in the world. The largest is Marsh and McLennan. This is until the Aon-Willis merger is completed. The merger, creating an $80 billion (equity value) company, will create the largest insurance broker in the world, surpassing Marsh & McLennan. Marsh, in April of 2019, acquired British rival Jardine Lloyd Thompson for $5.7 billion to create what was then the world’s largest insurance broker.
Both Aon and Willis, in addition to insurance and reinsurance broking, provide investment and benefits advice. Both are noted for their retirement business as well. Consulting, investments and retirement business comprises 16. percent of Aon’s revenue in 2019, while it comprised 48.6 percent of Willis’ 2019 revenue.
Willis shareholders will receive 1.08 Aon shares for each of their shares. The offer represents a premium of 16.2 percent for Willis to the closing price of Willis shares on March 6, 2020. Willis had demanded for this “meaningful premium” at the range of 20 percent. Upon completion of the deal, Aon shareholders will own 63 percent and Willis shareholders will own 37 percent of the combined or merged company on a fully diluted basis. Aon structure and the controlling shareholders for Aon will not change. Management will be retained by Aon Chief Executive Officer Greg Case and Aon Chief Financial Officer Christa Davies. But Willis CEO John Haley will become the executive chairman. The Board of Directors will be represented proportionately. The financial advisor is Credit Suisse Securities (USA) for Aon and Goldman Sachs & Co. for Willis. Aon will keep its headquarters in London.
Its Philippine operations through Aon Insurance and Reinsurance Brokers Phils., Inc. will not be affected. Aon operates in 120 countries including the Philippines.
