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Mar 11, 2020

Aon and Willis Tower Watson merger

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It has been announced that Aon is to buy Willis Towers Watson (WTW) in a US$30bn deal to create the world’s largest global insurance broker - reducing the “Big 3” made up of Marsh, Aon and WTW to the “Big 2”.

Discussions of a proposed acquisition between the two brokers go back to March 2019 however initial negotiations were short lived following a leak and due to Irish regulation, Aon had to wait for 12 months before approaching WTW again.

The news comes less than a year after the completed acquisition of Jardine Lloyd Thompson by Marsh & McLennan which, at the time of writing, is the largest global insurance broker in the world. But this is set to be somewhat overshadowed as the combined market share of Aon and WTW will eclipse that of Marsh. Indeed, the market share of the two new companies will be vast, potentially reducing competition and putting pressure on the remaining, smaller intermediaries.

Subsequently, rating agency Standard & Poor's issued a warning note about the possibility of risks involving the integration of the two companies and there is speculation that in order to be gain regulatory approval, WTW may have to sell off Willis Re along with another subsidiary Miller, which is already up for sale.

It is expected that the new joint leadership team will be announced in June 2020 and the deal’s expected completion to be in the first half of 2021.