Aon has agreed to buy peer Willis Towers Watson in an all-share tie-up valued at $30 billion, which combines the industry’s second and third largest insurance brokers.
The announcement of the deal comes 12 months after Aon revealed it had dropped plans to pursue a bid for its nearest rival and follows Marsh & McLennan’s acquisition of Jardine Lloyd Thompson.
The deal – which is expected to complete during the first half of 2021 – is expected to result in annual pre-tax cost synergies of $800 million from the third year after completion, but be accretive to Aon’s adjusted earnings per share in year one and peak in the high teens.
Willis Towers Watson shareholders will receive 1.08 Aon shares for each Willis Towers Watson share, representing a 16.2% premium to Willis Towers Watson’s closing share price the day prior to the deal being announced.
“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,” said Willis Towers Watson chief executive, John Haley. “This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value.”