Aon-Willis bosses seek ‘better not bigger’ and fulfilling unmet client needs

The  merger between Aon and Willis Towers Watson is driven by a desire to better serve clients’ needs as opposed to being bigger, Aon CEO Greg Case, who will also lead the combined entity, said on a conference call discussing the deal held on Monday, March 9.

The call followed the shock announcement that the two brokers are to merge in an all-stock transaction valued at approximately $80 billion. The deal comes almost exactly a year after the two companies scrapped moves to complete a similar deal inMarch 2019, just a day after Aon was forced to disclose that discussions had taken place because of Irish takeover regulations.

Case said that the risk transfer industry generally had failed to keep pace with the demands and needs of clients, and that the long-term vision of the combined companies was to better serve clients through innovation on many fronts.

“It is not about being bigger, it is about being better,” Case said. “If you think about client needs and how have we done as an industry to address client needs, overall, as an industry, we have not progressed as fast as our clients. This combination is about how we address their unmet needs.

“If you just look at the challenges of cyber, for example, instead of that being a $6 billion market, let’s make it a $20-30 billion opportunity. And then there are intangible assets. Some 85 percent of our clients’ value is intangible assets yet our industry as not done anything about that. These are unmet needs and it is about how we address these in a much more holistic way.”

Case added that he sees the deal as the “most meaningful” in Aon’s history with a combination of content, capability and talent that will allow the companies to deliver “exceptional” value for shareholders.

“It comes back to addressing unmet needs of clients,” he said. “We have a lot of expertise on both sides. Our combined talent based will mean more impact with clients in a very effective way.”

John Haley, the CEO of Willis Towers Watson and future executive chairman of the combined firms, agreed that the purpose of the deal was not about getting bigger but about combining the firms’ complementary capabilities. “It’s a great fit given the capabilities they [Aon] have. The exciting thing is that they are complementary in nature. We can deliver new value to clients.

"It’s about not where we are today but where we can be in the future and being better able to serve clients and leading to better outcomes for them.”

Hayley also said the companies have a shared vision, which is also aligned. “One of the things most attractive to me is the shared vision. If you take the Aon United strategy and the way Aon positions itself as a global financial services firm – that is the direction were headed. We do have a shared vision of the market and these unmet client needs. When I look at how the two firms match up, it is hard to imagine anyone else matching up in that way.”

The deal will see each Willis Towers Watson share exchanged for 1.08 shares of Aon at a fixed exchange ratio. Aon shareholders will own approximately 63 percent of Aon, and Willis Towers Watson shareholders will own approximately 37 percent on a fully diluted basis.

Upon completion, the combined firm will go to market under the Aon brand, and will maintain operating headquarters in London, UK.

The combined company will be led by Aon CEO Case and Aon CFO Christa Davies.

Haley, CEO of Willis Towers Watson, will take on the role of executive chairman "with a focus on growth and innovation strategy".

The board of directors will comprise proportional members from Aon and Willis Towers Watson’s current directors.

The transaction is expected to close in the first half of 2021, subject to regulatory and shareholder approvals and other customary closing conditions.

The transaction will be effected by an Irish scheme of arrangement.