Aon mulls bid for Willis Towers Watson

March 6 2019 by InsuranceAsia News Staff

Broking powerhouse Aon, headquartered in London, has confirmed it is considering a bid for UK rival Willis Towers Watson (WTW) after media speculation; in a statement it describes the transaction as at a “preliminary stage”.

WTW’s shares finished up 5.2% on the news valuing the company at almost US$23.5 billion; in contrast Aon’s share price dropped 7.8% valuing the firm at around US$37.7 billion.

A combination of the two brokers, the second and third largest in the world, could mean a larger Aon leapfrogs New York-headquartered Marsh & McLennan as the world’s largest broker. In addition to corporate broking, both Aon and WTW have large reinsurance broking arms.

However any acquisition would face strong scrutiny from regulators and competition authorities given the scale of the two firms.

Aon, overseen by chief executive Greg Case, said it is considering an “all share business combination” but no final decision has yet been made and a further announcement would be made in “due course”.

The insurance broking market has been consolidating heavily in recent years with the likes of Hyperion and Arthur J Gallagher particularly active. However Marsh & McLennan’s imminent completion of the purchase of London-headquartered global broker JLT has probably been the greatest catalyst for Aon to consider such a purchase. In order to help facilitate the deal with regulators JLT is in the process of selling its aerospace division to Arthur J Gallagher.

Willis merged with consultancy Towers Watson in 2016 in a US$8.9 billion deal to form Willis Towers Watson.

Both Aon and WTW have large presences in Asia Pacific.

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