This blockbuster global brokerage merger goes to vote Aug. 26

The industry will be closer to finding out whether the second and third-biggest global P&C brokerages will merge after shareholders of both Willis Towers Watson plc and Aon plc vote on Wednesday.

Aon and Willis announced this past March that their boards of directors are in favour of the acquisition by Aon, which has several more hurdles to clear, even if shareholders approve the deal Aug. 26.

“We are exactly on track with our original time period,” which is to close the acquisition during the first half of 2021, Aon chief financial officer Christa Davies said last month during a conference call discussing Aon’s financial results for the three months ending June 30.

Aon is holding two meetings — one in Chicago and the other in Dublin — at 11:00 a.m. Eastern time this Wednesday.

Willis Towers Watson has also scheduled two meetings — one in Miami and one in Dublin — the same day. Both companies are incorporated in Ireland, with principal offices in London and are traded on the New York Stock Exchange. Shareholders of Willis Tower Watson can mail their votes in or also vote by phone or internet, a company spokesperson told Canadian Underwriter.

Due to the COVID-19 pandemic, Aon said July 8 it is advising shareholders to vote their shares in advance by internet, phone or mail.

Even if shareholders of both firms approve the acquisition, it is still subject to approval from Irish High Court as well as competition regulators in the United States, Canada, the European Union, Australia, China, Mexico, New Zealand, Russia, Singapore, South Africa and Turkey, Aon said in an earlier securities filing.

If the merger closes, each Willis Towers Watson shareholder would receive 1.08 Aon shares for each of its Willis Towers Watson shares, plus cash. Aon shareholders will continue to own the same number of Aon shares as they do immediately prior to the closing. Following the closing, existing Aon shareholders will own approximately 62.3% and existing Willis Towers Watson shareholders will own approximately 37.7% of the combined company.

Both Aon and Willis Towers Watson have multiple offices in Canada from which they place commercial property and casualty insurance.

“We have been saying for some time that the world is becoming more volatile, economically, demographically and geopolitically. And the events of the last 100 days only underscore that reality,” Aon CEO Greg Case said July 31 during the Q2 earnings call, alluding to the lockdowns and economic disruption that arose from COVID-19, which the World Health Organization declared a pandemic March 11.

“At a time when our clients need us most, the combination with Willis Towers Watson further strengthens our client-serving capability and puts us in a position to best address their unmet needs,” said Case.

Aon and Willis were ranked second and third — with global revenues of $11 billion and $9 billion in 2019 respectively — on A.M. Best Company Inc.’s list of the top 20 global insurance brokerages. All figures are in United States dollars. Topping the list was Marsh & McLennan Companies Inc., with $17 billion in revenue in 2019. Marsh & McLennan displaced Aon as the top global commercial P&C brokerage when Marsh & McLennan acquired Jardine Lloyd Thompson in 2019. Placing fourth and fifth were Arthur J. Gallagher & Co. and Hub international Ltd., with $7 billion and $2.4 billion respectively in revenues in 2019. Both Gallagher and Hub have made several acquisitions in Canada in recent years.

 

Feature image via iStock.com/peshkov