How Aon’s proposed takeover of Willis Towers Watson is going

Aon plc has yet to complete its proposed acquisition of Willis Towers Watson plc, but the future management team of the combined brokerage is already starting to collaborate, Aon CEO Greg Case suggested last week.

Shareholders of both Aon and Willis Towers Watson voted this past August in favour of the deal. If completed, the deal would form the world’s largest commercial property and casualty insurance brokerage. The deal was originally announced in March 2020.

Willis Towers Watson and Aon cannot actually operate together until the deal closes, Case said Feb. 5 during a conference call discussing Aon’s 2020 financial results.

Dublin-based Aon did release Jan. 27 an organizational chart listing its future leadership team that would take effect assuming the deal closes. For example, Case would be the CEO while Alexis Farber, currently chief operating officer for corporate risk and broking at Willis Towers Watson, would be the North American CEO for the combined firm.

“We are going to operate separately until we close, but we have had a chance to get this group together and in the planning process,” Case said Feb. 5 during a Q&A session with stock-and-bond analysts.

Among the issues the future leadership team is discussing is how the brokerages can help clients deal with a number of issues such as climate change, pandemic, cyber risk, and intellectual property risks.

“This team has really begun to come together, thinking about a ‘one-firm’ approach to how we deliver the best of our capabilities,” said Case.

When pressed for details about the deal’s status, Aon CFO Christa Davies reiterated that Aon “remains committed” to closing the deal during the first half of 2021, as originally expected.

The deal is subject to a number of conditions, including approval by regulators in several jurisdictions. It also requires approval from the Irish High Court. Willis Towers Watson is domiciled in Ireland with its principal executive office on Lime Street in London, England.

Aon moved from Chicago to London in 2012, and then re-domiciled to the Republic of Ireland in 2020.

“We continue to work collaboratively with the appropriate regulators to gain approval in a timely manner,” Davies said Friday of the Willis Towers Watson deal.

Aon recorded net income of $2 billion in 2020, up 28% from $1.57 billion in 2019. Total revenue was essentially unchanged at about $11 billion both in 2019 and 2020.

On its income statement, Aon reported sharp decreases in several categories of expenses, including information technology and premise. For example IT expenses dropped from US$131 million in 2019 to US$119 million in 2020. This was due primarily to decreases in charges from a restructuring program announced in 2017. At that time, Aon had estimated its total restructuring charge – including IT rationalization and lease consolidation  – would be US$750 million over multiple years.

Feature image via iStock.com/erdikocak