London-based Aon Plc has abandoned its efforts to pursue an all-share business combination with Willis Towers Watson, the company said in a statement on Wednesday.
The statement was issued just one day after Aon reported it is in the “early stages” of considering a buyout of the company. On Tuesday, Aon issued a release that was mandated by Irish regulatory requirements after news media outlets leaked intelligence of the buyout. Willis Towers is based in Ireland.
“Consistent with Aon’s stated focus on return on invested capital the firm regularly evaluates a variety of potential opportunities within and adjacent to its industry. Aon had considered such a possibility with regard to Willis Towers Watson,” Aon said in the Wednesday statement. “Aon today confirms that it does not intend to pursue the business combination.”
The transaction would have made the combined company the largest insurance broker globally, surpassing Marsh & McLennan’s current No. 1 spot in the market, according to data compiled by Bloomberg. The companies had held preliminary talks and Aon was preparing to submit a bid in the coming weeks, the publication reported, citing people familiar with the matter.
“The company emphasizes that, at this point, its evaluation of a potential transaction is at a preliminary stage and there can be no certainty that any transaction will take place nor as to the form or terms on which any transaction might be pursued,” Aon said in the Tuesday statement.
Willis Towers Watson shares soared to an all-time high following the news, up approximately 5.2% after the statement was released, scoring a valuation of approximately $24 billion. Aon shares dipped considerably after the statement.
As of press time, Willis Towers Watson stock dipped 6.57% , and Aon shares rose 4.47%.
Willis Towers Watson has not issued a formal statement on its website regarding the news.
Aon generated $10.8 billion in revenue in 2018, while Willis Towers Watson generated $8.5 billion and Marsh & McLennan reported $15 billion. Willis Towers Watson was formed after Willis Group Holding’s 2016 acquisition of Towers Watson & Co. for $8.9 billion, the largest insurance broker deal to date.
Marsh & McLennan last year carried out an agreement to buy Jardine Lloyd Thompson for $5.7 billion, which is expected to close at some point during the year.
Aon employs over 50,000 individuals in 120 countries, while Willis Towers employs approximately 43,000.
Related Stories:
Aon: Complacency Biggest Risk for Canadian Pensions
Pensions Account for 61% of Top 100 Asset Owners
Tags: Aon, insurance, Merger, Willis Towers Watson