- Transaction is a key step on path to close proposed
combination designed to accelerate innovation on behalf of
clients
- Aon remains committed to $800
million of cost synergies and expects the combination to
create significant shareholder value
DUBLIN, May 12, 2021 /PRNewswire/ -- Aon plc (NYSE:
AON) and Willis Towers Watson
(NASDAQ: WLTW) today announced they have signed a definitive
agreement 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.
(Gallagher). These businesses will be divested for a total
consideration of $3.57 billion.
The agreement resolves questions raised by the European
Commission and is intended to address certain questions raised by
regulators in certain other jurisdictions. Aon and Willis Towers Watson 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."
Aon remains positioned to further build on the firm's track
record of over a decade of progress on key financial metrics and
achievement of external commitments. The pending combination with
Willis Towers Watson is expected to
deliver:
- Revenue growth, margin expansion through delivery of better
solutions, increased cash flow and earnings growth and a strong
balance sheet, to generate attractive returns for shareholders in
the future.
- $800 million of cost
synergies1, taking into account this divestiture and
other potential remedies.
- Allocation of any divestiture proceeds according to Aon's ROIC
framework, in which the firm expects that share buyback will
continue to be its highest return activity.
- Accretion to adjusted EPS, reflecting the synergy potential of
the combination, consistent with initially announced accretion
projections in year three and over the long
term.2,3
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 that
includes:
- 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.
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. 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.
About Aon
Aon plc (NYSE: AON) is a leading global professional services
firm providing a broad range of risk, retirement and health
solutions. Our 50,000 colleagues in 120 countries empower
results for clients by using proprietary data and analytics to
deliver insights that reduce volatility and improve
performance.
Follow Aon on Twitter and LinkedIn
Stay up to date by visiting the Aon Newsroom and hear from Aon's
expert advisors in The One Brief.
Sign up for News Alerts here
About Willis Towers
Watson
Willis Towers
Watson is a leading global advisory, broking and solutions
company that designs and delivers solutions that manage risk,
optimize benefits, cultivate talent and expand the power of capital
to protect and strengthen institutions and individuals.
Willis Towers Watson has more than
45,000 employees and services clients in more than 140 countries.
For more information about Willis Towers
Watson, see www.willistowerswatson.com.
Media Contacts
Aon - Nadine
Youssef, mediainquiries@aon.com, +1 833 751 8114
Willis Towers Watson - Miles Russell,
miles.russell@willistowerswatson.com, +44 (0) 7903262118
Investor Contacts
Aon - Leslie
Follmer, investor.relations@aon.com, +1 312 381 3310
Willis Towers Watson - Claudia De La Hoz,
Investor_Relations@willistowerswatson.com, +1 215 246 6221
Statements Required by the Irish Takeover Rules
The
directors of Aon accept responsibility for the information
contained in this document relating to Aon, except for statements
made by WTW in respect of Aon. To the best of the knowledge and
belief of the directors of Aon (who have taken all reasonable care
to ensure that such is the case), the information contained in this
announcement for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
The directors of WTW accept responsibility for the information
contained in this document relating to WTW, except for statements
made by Aon in respect of WTW. To the best of the knowledge and
belief of the directors of WTW (who have taken all reasonable care
to ensure that such is the case), the information contained in this
announcement for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
No statement in this announcement is intended to constitute a
profit forecast for any period, nor should any statements be
interpreted to mean that earnings or earnings per share will
necessarily match or be greater or lesser than those for the
relevant preceding financial periods for Aon and/or WTW as
appropriate. No statement in this announcement constitutes an asset
valuation.
Safe Harbor Statement
This communication contains
certain statements that are forward-looking, as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are prospective in nature and are not
based on historical facts, but rather current expectations of
management about future events. Forward-looking statements can
often, but not always, be identified by the use of words such as
"plans," "expects," "is subject to," "budget," "scheduled,"
"estimates," "forecasts," "looking forward," "potential,"
"probably," "continue," "intends," "anticipates," "believes," or
variations of such words, and statements that certain actions,
events or results "may," "could," "should," "would," "might" or
"will" be taken, occur or be achieved. Although management believes
that the expectations reflected in these forward-looking statements
are reasonable, it can give no assurance that these expectations
will prove to be correct. These forward-looking statements include
information about possible or assumed future results of Aon's
and/or WTW's operations, the uncertainty surrounding the COVID-19
pandemic, the pending combination of Aon and WTW (the
"Combination"), expectations related to regulatory approvals of the
Combination, and divestitures to be made in connection with the
Combination. All statements other than statements of historical
facts that address activities, events or developments that Aon
and/or WTW expects or anticipates may occur in the future,
including such things as its or their outlook, future capital
expenditures, growth in commissions and fees, changes to the
composition or level of its or their revenues, cash flow and
liquidity, expected tax rates, business strategies, competitive
strengths, goals, the benefits of new initiatives, growth of its or
their business and operations, plans, references to future
successes, and expectations with respect to the timing, closing and
benefits of the Combination, including divestitures made in
connection with the Combination, are forward-looking
statements.
By their nature, forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from either historical or anticipated results
depending on a variety of factors. The following factors, among
others, could cause actual results to differ from those set forth
in or anticipated by the forward-looking statements: changes in
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax laws, regulations, rates and policies; general economic and
political conditions in different countries in which Aon and/or WTW
does business around the world, including the UK's withdrawal from
the European Union; changes in the competitive environment or
damage to Aon's and/or WTW's reputation; fluctuations in exchange
and interest rates that could influence revenue and expenses;
changes in global equity and fixed income markets that could affect
the return on invested assets; changes in the funding status of
Aon's and/or WTW's various defined benefit pension plans and the
impact of any increased pension funding resulting from those
changes; the level of Aon's and/or WTW's debt limiting financial
flexibility or increasing borrowing costs; rating agency actions
that could affect Aon's and/or WTW's ability to borrow funds;
volatility in Aon's and/or WTW's tax rate due to a variety of
different factors, including U.S. tax reform; changes in estimates
or assumptions on Aon's and/or WTW's financial statements; limits
on Aon's and/or WTW's subsidiaries to make dividend and other
payments to Aon and/or WTW, as applicable; the impact of lawsuits
and other contingent liabilities and loss contingencies arising
from errors and omissions and other claims against Aon and/or WTW;
the impact of, and potential challenges in complying with,
legislation and regulation in the jurisdictions in which Aon and/or
WTW operates, particularly given the global scope of Aon's and/or
WTW's businesses and the possibility of conflicting regulatory
requirements across jurisdictions in which Aon and/or WTW does
business; the impact of any investigations brought by regulatory
authorities in the U.S., Ireland,
the UK and other countries; the impact of any inquiries relating to
compliance with the U.S. Foreign Corrupt Practices Act and non-U.S.
anti-corruption laws and with U.S. and non-U.S. trade sanctions
regimes; failure to protect intellectual property rights or
allegations that Aon and/or WTW infringes on the intellectual
property rights of others; the effects of Irish law on Aon's and
WTW's operating flexibility and the enforcement of judgments
against Aon and/or WTW; the failure to retain and attract qualified
personnel, whether as a result of the Combination, divestitures
made in connection with the Combination or otherwise; international
risks associated with Aon's and/or WTW's global operations; the
effects of natural or man-made disasters, including the effects of
COVID-19 and other health pandemics; the potential of a system or
network breach or disruption resulting in operational interruption
or improper disclosure of personal data; Aon's and/or WTW's ability
to develop and implement new technology; the damage to Aon's and/or
WTW's reputation among clients, markets or third parties; the
actions taken by third parties that perform aspects of Aon's and/or
WTW's business operations and client services; the extent to
which Aon and/or WTW manages certain risks created in connection
with the services, including fiduciary and investments, consulting,
and other advisory services, among others, that Aon and/or WTW
currently provides, or will provide in the future, to clients;
Aon's and/or WTW's ability to continue, and the costs and risks
associated with, growing, developing and integrating companies that
it acquires or new lines of business; changes in commercial
property and casualty markets, commercial premium rates or methods
of compensation; changes in the health care system or Aon's and/or
WTW's relationships with insurance carriers; Aon's and/or WTW's
ability to implement initiatives intended to yield, and the ability
to achieve, cost savings; Aon's and/or WTW's ability to realize the
expected benefits from its restructuring plan; the possibility that
the Combination, or divestitures made in connection with the
Combination, will not be consummated in the expected timeframe, or
at all; failure to obtain necessary regulatory approvals for the
Combination or divestitures or to comply with the requirements
related to such approvals, or to satisfy any of the other
conditions to the Combination or divestitures made in connection
with the Combination; potential litigation associated with the
proposed Combination, including by regulators; adverse effects on
the market price of Aon's and/or WTW's securities and/or operating
results for any reason, including, without limitation, because of a
failure to consummate the Combination or the divestitures made in
connection with the Combination; the failure to realize the
expected benefits of the Combination (including anticipated revenue
and growth synergies) in the expected timeframe, or at all; the
failure to effectively integrate the combined businesses following
the Combination; significant transaction and integration costs or
difficulties in connection with the Combination, or divestitures
made in connection with the Combination, and or unknown or
inestimable liabilities; the potential impact of the consummation
of the Combination and divestures made in connection with the
Combination on relationships, including with suppliers, customers,
employees and regulators; and general economic, business and
political conditions (including any epidemic, pandemic or disease
outbreak, including COVID-19) that affect the combined company
following the consummation of the Combination.
Any or all of Aon's and WTW's forward-looking statements may
turn out to be inaccurate, and there are no guarantees about Aon's
or WTW's performance. The factors identified above are not
exhaustive. Aon, WTW and their respective subsidiaries operate in a
dynamic business environment in which new risks may emerge
frequently. Other unknown or unpredictable factors could also cause
actual results and developments to differ materially from those
expressed or implied by the forward-looking statements.
Forward-looking statements should therefore be construed in the
light of such factors. Accordingly, you should not place undue
reliance on forward-looking statements, which speak only as of the
date on which they are made. In addition, results for the year
ended December 31, 2020 and the
quarter ended March 31, 2021, are not
necessarily indicative of results that may be expected for any
future period, particularly in light of the continuing effects of
the COVID-19 pandemic. Further information concerning Aon, WTW and
their respective businesses, including factors that potentially
could materially affect Aon's or WTW's financial results, are
contained in Aon's and WTW's respective filings with the Securities
and Exchange Commission (the "SEC"). See
Aon's and WTW's respective Annual Reports on Form 10-K for
the year ended December 31, 2020 and
their respective Quarterly Reports on Form 10-Q for the quarter
ended March 31, 2021 for a further
discussion of these and other risks and uncertainties applicable to
Aon and WTW and their respective businesses. These factors may be
revised or supplemented in subsequent reports filed with the SEC.
Neither Aon nor WTW is under, and each expressly disclaims, any
obligation to update or alter any forward-looking statement that it
may make from time to time, whether as a result of new information,
future events or otherwise. All subsequent written and oral
forward-looking statements attributable to Aon, WTW and/or any
person acting on behalf of any of them are expressly qualified in
their entirety by the foregoing paragraphs, and the information
contained on any websites referenced in this communication is not
incorporated by reference into this communication.
1 There are various material assumptions underlying
the synergies, which may result in the synergies and other cost
reductions being materially greater or less than estimated. The
estimates should therefore be read in conjunction with the bases
and assumptions for these synergy numbers, which are set out in
Appendix I of the Rule 2.5 Announcement made on March 9th, 2020, along with the
reports accompanying such statements in Appendix 4 and Appendix 5
to the Rule 2.5 Announcement.
2 This statement should not be construed as a profit
forecast or interpreted to mean that the profits or earnings of Aon
will necessarily match or be greater than or be less than those for
the relevant preceding financial period or any other period.
3 Statements in this announcement that the
combination of Aon and Willis Towers
Watson is accretive to adjusted EPS should not be
interpreted to mean that Aon earnings per share in the current or
any future financial period will necessarily match or be greater
than or be less than those for the relevant preceding financial
period.
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SOURCE Aon plc