March 09, 2020
Global (re)insurance broker, Aon confirms the merge with broker Willis Towers Watson announcing a definitive agreement in an all-stock transaction with an implied combined equity value of approximately $80bn.
The combined company will continue to operate under the name Aon and will maintain operating headquarters in London.
The new firm will be led by 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 organisations.
Current CEO of Willis Towers Watson, John Haley will take on the role of executive chairman of the combined company and focus on growth and innovation strategy.
The Board of Directors will comprise proportional members from Aon and Willis Towers Watson's current directors.
Now the confirmation has been released after speculation last week, Aon explained the deal with Willis Towers Watson will provide both companies an opportunity to expand and further accelerate its existing growth strategy. The new firm will be positioned to maintain and immediately deliver mid-single digit organic revenue growth and double-digit free cash flow growth.
Aon states in the press release that the rationale of the combination of two highly complementary businesses into a technology-enabled global platform is more relevant and responsive to client needs sharing a belief in the power of data-driven insights to create new sources of client value.
The deal is expected to drive year one earnings accretion to Aon adjusted EPS with free cash flow accretion of more than 10% after full realisation of $800mn of expected pre-tax synergies.
Aon claims the transaction is expected to generate more than $10bn in shareholder value creation from the capitalized value of expected pre-tax synergies.
Willis Towers Watson and Aon anticipate savings of $267mn in the first full year of the combination, reaching $600mn in the second full year, with the full $800mn achieved in the third full year.
Each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing.
Upon completion, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis.
The combination is subject to the approval of the shareholders and regulatory approvals, however both parties expect the transaction to close in the first half of 2021.
John Haley, Willis Towers Watson CEO 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."
Greg Case, Aon CEO commented: "This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors. 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."