Aon and Willis Towers Watson to merge together

10 March 2020 — press.release
Aon and Willis Towers Watson officially announced the decision to merge, combining together in an all-stock transaction with an implied combined equity value of approximately USD 80 billion.

The combined company will operate under the name "Aon". It will be the premier, technology-enabled global professional services firm focused on the areas of risk, retirement and health. Aon will maintain operating headquarters in London, United Kingdom.

The combined firm will be led by Greg Case (Aon's Chief Executive Officer) and Christa Davies (Aon's Chief Financial Officer), along with a highly experienced and proven leadership team that reflects the complementary strengths and capabilities of both organizations. The Board of Directors will comprise proportional members from Aon and Willis Towers Watson's current directors.

Each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing. Upon completion of the combination, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis.

John Haley, CEO of Willis Towers Watson, said:

"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."

Greg Case, CEO of Aon, commented:

"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."

The transaction is expected to be accretive to Aon adjusted EPS in the first full year of the combination with peak adjusted EPS accretion in the high teens after full realization of USD 800 million of pre-tax synergies.

Willis Towers Watson and Aon anticipate savings of USD 267 million in the first full year of the combination, reaching USD 600 million in the second full year, with the full USD 800 million achieved in the third full year.

Free cash flow accretion is expected to breakeven in the second full year of combination with free cash flow accretion of more than 10% after full realization of synergies.

The transaction is expected to generate over USD 10 billion of shareholder value creation from the capitalized value of the expected pre-tax synergies, based on the blended 2020 price to earnings ratio of Willis Towers Watson and Aon UK on 6 March 2020, net of USD 2.0 billion in one-time transaction, retention and integration costs.

The transaction is subject to the approval of the shareholders of both Aon Ireland and Willis Towers Watson, as well as other customary closing conditions, including required regulatory approvals. The parties expect the transaction to close in the first half of 2021, subject to satisfaction of these conditions.

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