The confluence of the second and third largest insurance brokers will lead to reduced costs. Superior logistics and a consolidation of talent from two of the largest players.
This move allows both firms to differ risk and cut costs substantially. The deal is expected to reduce costs collectively by $800m by the third year.
Willis Towers Watson shareholders will receive 1.08 Aon shares for each Willis Towers Watson share, which represents a 16.2% premium to Willis Towers Watson’s closing share price on 6 March 2020.
Aon chief executive Greg Case:
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.
Willis Towers Watson chief executive John Haley added:
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.
The merging of the two companies is speculated to result in them created more robust business pipelines. The infusion of capital both tangible and via HR will allow them to delve further into more specific avenues such as cyber, delegated investments, intellectual property, climate risk and health solutions.
The resulting growth in these sectors coupled with shared clients should lead to added value for both companies now under the same umbrella.
The combined company will continue under the name Aon and there will be a merging of the two executive teams with John Haley taking on the role of Executive Chairmen.
The merger takes place as of today. However it will be completed in totality by the first half of 2021.