Gallagher scraps $3.57bn deal after Aon-Willis mega merger falls apart

Arthur J Gallagher has cancelled its agreement to buy certain brokerage operations of  Willis Towers Watson (WTW) as a result of  Aon and  WTW terminating their proposed $30 billion merger after they "reached an impasse" with the  US Department of Justice.

The two broking giants had reached an agreement in May to sell certain parts of Willis’ reinsurance, specialty and retail brokerage operations to Gallagher for a gross consideration of $3.57 billion - contingent on the Aon- Willis merger clearing, as well as the completion of other customary closing conditions.

The deal was designed to smooth the way for Aon’s acquisition of the business, while for Gallagher it would have meant a significant expansion of its footprint in the UK and US with a "powerful combination of expertise, geographic reach and scale".

Gallagher stated that following the termination of its agreement with WTW, it is planning to exercise the special optional redemption feature of its $650 million tranche of 10-year senior notes issued on May 20.

The company is considering opportunities to deploy its excess cash position through its merger programme and through potential share repurchases.

Gallagher plans to provide further updates on its second quarter 2021 earnings call on July 29 after the market closes.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.