The recent announcement of the Aon and Willis Towers Watson (WTW) business combination agreement has been making headlines in the world of business. This is a significant development that will have a significant impact on the global insurance and consulting industries.
Aon, a leading global professional services firm providing a broad range of risk, retirement, and health solutions, has agreed to acquire WTW, an Irish-based consulting firm that provides advisory, broking, and solutions services globally. The merger will create a new giant in the insurance industry, with a market value of approximately $80 billion.
The transaction will take the form of an all-stock deal, where WTW shareholders will receive 1.08 Aon shares for every WTW share they hold. Upon completion of the transaction, Aon shareholders will own 63% of the combined company, while WTW shareholders will own the remaining 37%.
The Aon-WTW combination is expected to create significant benefits for clients, colleagues, and shareholders. The merger will enable the combined company to bring together Aon`s expertise in risk management with WTW`s capabilities in human capital and benefits consulting. The resulting firm will offer clients a broader range of innovative solutions and services to meet their evolving needs.
The combination will also create significant cost synergies, with the merged entity expected to generate annual pre-tax cost synergies of $800 million by the third full year of the transaction`s completion. The companies have also announced that they expect to achieve a combined revenue of $20 billion by 2025, driven by organic growth, cross-selling opportunities, and strategic acquisitions.
The merger is subject to regulatory approval and is expected to close in the first half of 2021. Both companies have expressed their commitment to supporting their clients during the transaction period and are working to ensure a smooth transition.
In conclusion, the Aon-WTW business combination agreement is a significant development that will have far-reaching implications for the insurance and consulting industries. The merger will create a new global leader with enhanced capabilities and broader offerings to meet the evolving needs of clients. The combined company will benefit from significant cost synergies and growth opportunities, creating value for shareholders and clients alike. It will be interesting to watch how this transaction plays out and its impact on the industry as a whole.