Aon, Willis Towers Watson to Sell WTW Assets to Gallagher for $3.57 Billion

May 12, 2021

Aon plc and Willis Towers Watson have agreed to sell Willis Re and a set of Willis Towers Watson corporate risk and broking and health and benefits services to Arthur J. Gallagher & Co.

These businesses will be divested for a total consideration of $3.57 billion.

The agreement helps resolve questions raised by the European Commission and is intended to address certain questions raised by regulators in certain other jurisdictions, said the brokers in a statement.

Aon and Willis Towers Watson said they continue to work toward obtaining additional regulatory approval in all relevant jurisdictions, including the United States, where regulators are conducting an independent review of the Aon and WTW combination.

“This agreement demonstrates strong momentum on the path to close our proposed combination with Willis Towers Watson,” said Greg Case, Aon’s CEO. “We’ve used this time to align our future leadership team around a one-firm culture that will create new opportunities for colleagues, accelerate innovation on behalf of clients and deliver shareholders the long-term value creation they have come to expect from our team.”

Bloomberg reported Gallagher was in talks with the two rivals earlier this week.

Aon and Willis Towers Watson continue to progress with their integration planning, most recently highlighted by the announcement of the future leadership team that, following the close of the combination, will collaborate to deliver new sources of value to clients and create new opportunities for colleagues.

“We announced this combination knowing that the complementary capabilities of our two firms would allow us to deliver more value to clients and opportunities for colleagues. The events of the last year have only reinforced that rationale, and this announcement is an important step toward realizing that potential,” said John Haley, Willis Towers Watson’s CEO. “We appreciate the extraordinary value these colleagues have delivered to our clients and our company. We are confident they have a bright future at Gallagher.”

Gallagher is a global leader in insurance, risk management and consulting services – generating more than $6 billion in 2020 revenue. The company is headquartered in Rolling Meadows, Ill. and has more than 34,000 employees in 56 countries.

Gallagher has agreed to purchase a group of businesses from Willis Towers Watson including:

  • Willis Re operations globally, excluding operations in mainland China and Hong Kong;
  • Global cedent facultative reinsurance, excluding operations in mainland China and Hong Kong;
  • Corporate Risk and Broking business unit known as Inspace globally and certain business undertaken for Aerospace Manufacturing clients;
  • Corporate Risk and Broking services in certain countries in Europe (France, Germany, the Netherlands and Spain), excluding Affinity; Bermuda; cyber in the UK; and certain accounts in the Houston and San Francisco offices in the U.S.;
  • Corporate Risk and Broking services for Property & Casualty and Finex insurance in the European Economic Area, UK, U.S., Brazil and Hong Kong relating to certain large multinational companies headquartered in France, Germany, the Netherlands and Spain;
  • Corporate Risk and Broking Finex accounts relating to certain large multinational companies headquartered in the UK; and
  • Health & Benefits business units in France, Spain and Germany.

“This acquisition will accelerate our long-term strategy by significantly expanding our global value proposition in reinsurance, broadening our retail brokerage footprint and strengthening key niches and specialty brokerage offerings,” said J. Patrick Gallagher, Jr., chairman, president and CEO of Gallagher, in a statement.

“The powerful combination of expertise, geographic reach and scale that this acquisition presents will greatly enhance our offerings to clients and prospects, while also providing significant value for our colleagues, carrier partners and shareholders. Most importantly, I look forward to welcoming more than 6,000 new colleagues to our growing Gallagher family of professionals,” he added.

Gallagher said the benefits of the acquisition are expected to include:

  • Expanded global value proposition within reinsurance brokerage
  • Broadened global footprint in retail property casualty and health & benefits brokerage
  • Increased depth in key niches and specialty operations such as energy, construction, cyber, space, and aerospace products
  • A comprehensive suite of analytics capabilities including catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
  • Stronger relationships with major insurance carriers and new relationships with middle market and large account retail clients
  • Added platforms for future tuck-in acquisitions.

The transaction with Gallagher is contingent on the completion of the pending Aon and Willis Towers Watson combination, as well as other customary closing conditions, Aon and WTW said in a statement.

While Aon and WTW are working to complete their combination as soon as possible during the third quarter of 2021, the completion remains subject to the receipt of required regulatory approvals and clearances, including with respect to United States antitrust laws, as well as other customary closing conditions.

The European Commission competition panel last week moved its decision date for the Aon-Willis Towers Watson merger by five business days from July 27 to August 3.

Last month, the EU antitrust regulators asked Aon rivals and customers which competitors would be suitable buyers for assets to address competition concerns about the $30 billion bid for WTW. The list of nine brokers offered for consideration included Gallagher.

Source: Aon and Willis Towers Watson

Topics Aon Willis Towers Watson A.J. Gallagher

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