Aon has now confirmed that it has been in talks with broking rival Willis Towers Watson regarding a potential merger combination, saying that it they are in early stage discussions. Update, March 6th: Aon said the combination is now not being considered.
Earlier today the news broke that insurance and reinsurance broking giant Aon was considering a bid to acquire rival Willis Towers Watson, a deal that would position Aon as the largest in the broking world.
With Aon number two, in terms of broking, the combination with number three Willis Towers Watson would propel it ahead of rival Marsh & McLennan.
Aon is already a significant player in reinsurance and insurance-linked securities (ILS) or collateralized markets, but the addition of Willis Towers Watson (WTW), with its Willis Re reinsurance broking division and capital markets expertise could expand the firms reach significantly.
Just recently Aon confirmed that it is in discussions with WTW, saying they are “in the early stages of considering an all-share business combination.”
However, Aon emphasised that, “at this point, its evaluation of a potential transaction is at a preliminary stage and there can be no certainty that any transaction will take place nor as to the form or terms on which any transaction might be pursued.”
WTW shares soared on the initial news today, up as much as 8.3% to value the firm at a high of roughly $24 billion.
Aon, already valued at around $40 billion, saw its shares drop later in the day, being down around -7% currently.
Currently Marsh & McLennan, which recently acquired JLT, is the largest brokerage by revenue, Bloomberg said, but acquiring WTW could propel Aon (second largest) into first place there (WTW is currently third).
It would also be perhaps the largest merger and acquisition transaction in insurance and reinsurance market history.
Aon said that a further announcement will be made in due course, as appropriate. No comment has yet been forthcoming from Willis Towers Watson.