Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Aon (AON) To Acquire Willis Towers In All-Stock Transaction

By Zacks Investment ResearchStock MarketsMar 09, 2020 11:34PM ET
Aon (AON) To Acquire Willis Towers In All-Stock Transaction
By Zacks Investment Research   |  Mar 09, 2020 11:34PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Aon plc (NYSE:AON) has entered into an agreement with Willis Towers Watson Public Limited Company (NASDAQ:WLTW) to merge in an all-stock deal, which is expected to serve clients better. The transaction will likely close in the first half of 2021.

This acquisition is the insurance sector's largest deal, combining the world’s second and the largest insurance brokers.

Details of the Transaction

Per the deal, each Willis Towers shareholder will get 1.08 Aon ordinary shares for every Willis Towers Watson ordinary share. The value reflects a 16.2% premium to Willis Towers’ closing price on Mar 6, 2020. Whereas Aon stockholders would continue to own the same number of ordinary shares in the newly-combined entity.

Shareholders of Aon will own about 63% while Willis investors will hold nearly 37% of the combined company.

Upon closure, the deal is expected to be accretive to Aon’s adjusted EPS in the first year. Moreover, free cash flow accretion of more than 10% after full realization of $800 million of pre-tax synergies is also anticipated.

The deal will enable both companies to continue with their commitment to attain long-term financial goals.

The combined entity will likely carry on with significant growth-related investments after impressive cost savings.

Rationale Behind the Deal

This all-stock merger with combined equity value of approximately $80 billion, overtaking Marsh & McLennan Companies Inc (NYSE:MMC) , is projected to deliver improved outcomes for all shareholders.

The unique blend of the two companies — well-complementing each other — on this advanced, technology-powered global platform is anticipated to provide data-driven insights for creating new sources of client value.

Underpenetrated client demands in areas like cyber, climate risk and delegated investments would be met with the expertise of both houses. In fact, the combined entity will cater to clients across risk, retirement and health businesses.

The deal happened at a time when the market is quite volatile with insurers facing high claims and new threats in the wake of the coronavirus outbreak.

Other Major Acquisitions in the Same Space

Last year Marsh’s purchase of Jardine Lloyd Thompson Group plc for a consideration of $5.6 billion helped it expand its capabilities. The combination of these companies would likely help them combat risks, such as climate change, cybersecurity, etc.

Insurance brokers have been looking for ways to fight the evolving challenges and boost their company portfolios. In this context, these strategic initiatives will be of great help.

Shares of this Zacks Rank #2 (Buy) company have gained 8.6% in a year's time, underperforming its industry's growth of 10.9%. The performance looks subdued when compared with another company’s rally in the same space, which is Brown & Brown, Inc. (NYSE:BRO) , having surged 45% in the same time frame. You can see the complete list of today’s Zacks #1 Rank stocks here.

However, the company’s inorganic growth strategy will likely aid its stock performance to bounce back going forward.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.7% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report

Aon plc (AON): Free Stock Analysis Report

Brown & Brown, Inc. (BRO): Free Stock Analysis Report

Willis Towers Watson Public Limited Company (WLTW): Free Stock Analysis Report

Original post

Zacks Investment Research
Aon (AON) To Acquire Willis Towers In All-Stock Transaction

Related Articles

Aon (AON) To Acquire Willis Towers In All-Stock Transaction

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email