Aon (AON), Willis Towers (WLTW) scrap $30 billion merger

• The Justice Department had alleged the tie-up of insurance brokers would lead to higher prices and reduced innovation for U.S. 

 

Willis Towers Watson and Aon plc (AON) agree to terminate their merger agreement and end litigation with the DoJ; AON to pay WLTW a $1 bln termination fee 

• "Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice," said Aon CEO Greg Case. "The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point."
• In connection with the termination of the business combination agreement, Aon will pay the $1 billion termination fee to Willis Towers Watson, Willis Towers Watson's proposed scheme of arrangement has now lapsed, and both organizations will move forward independently. Both firms will provide further financial updates and outlooks on their respective Q2 2021 earnings calls, which take place on July 30 for Aon and August 3 for Willis Towers Watson.

-=Aon (AON) to acquire Willis Towers Watson (WLTW)

Today Aon (AON) agreed to acquire Willis Towers Watson (WLTW) in an all-stock transaction that values the combined company at about $80 billion.

• https://chicago.suntimes.com/business/2020/3/9/21172404/aon-deal-throws-willis-tower-name-up-in-the-air

The acquisition, the insurance sector's largest ever, unifies the second and third largest brokers globally into a company worth almost $80 billion, overtaking market leader Marsh & McLennan Companies Inc (MMC). It comes at a time when insurers are facing rising claims and new threats from the global outbreak of coronavirus and climate change.

Aon had scrapped plans last year to pursue a merger with Willis, a day after media reports forced it to reveal it was in the early stages of considering an all-stock offer for the Irish-domiciled company. The merger agreement came right after a 12-month restriction under Irish rules for revisiting the deal expired.

The timing also coincides with a violent market correction, as Wall Street's main stock indexes plummeted and the Dow Jones Industrials crashed 2,000 points on Monday, driven by 20% slump in oil prices and the rapid spread of coronavirus.

This also weighed on Aon, whose shares dropped 16% on Monday, much more than the 8% drop in Willis shares.