Aon-WTW merger deal gets thumbs-up from proxy advisers Glass Lewis and ISS

Proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) have urged Aon and Willis Towers Watson shareholders to vote in favour of their proposed merger, calling the $30 billion all-stock deal "strategically and financially compelling".

The two firms have recommended the broking companies to move ahead with the business combination that is expected to deliver $800 million of cost synergies and be accretive to both adjusted EPS and free cash flow.

In an independent report, Glass Lewis noted that it finds the proposed merger "strategically and financially compelling and structured in a reasonable manner which impacts an acceptable valuation and ownership split for WLTW shareholders".

ISS added "the strategic rationale is sound" while also highlighting that "Aon and WLTW have complementary businesses and client bases across geographies and client segments, which may provide the potential for revenue upside".

The special meeting of Willis Towers Watson shareholders ordered by the High Court of Ireland and the extraordinary general meetings of the shareholders of both Aon and Willis Towers Watson are scheduled to take place on August 26, 2020.

Upon completion of the merger, Willis Towers Watson shareholders will receive 1.08 Aon shares in exchange for each Willis Towers Watson share they held immediately prior to the closing.

The combination is expected to close in the first half of 2021, pending customary regulatory and other closing conditions.