Following weeks of speculation, the two entities have confirmed a merger will go ahead.
Aon and Willis Towers Watson have announced a definitive agreement to merge operations in an all-stock transaction with an implied combined equity value of about $121 billion (US$80 billion).
Global in nature, the deal includes Willis Towers Watson's local business; however a spokesperson for the Australian arm could not provide any further comment.
Under the deal, the two entities will combine under the Aon name and focus on the core areas of risk, retirement and health. The headquarters of the combined business will be Aon's existing London headquarters.
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It's not the first time a merger between Aon and Willis Towers Watson has been floated, with the former confirming it was in the process of formulating a deal in March 2019. Those talks collapsed shortly after.
Late last month Willis Towers Watson confirmed it was exploring options for part of its business, leading to speculation it was laying the ground work for a broader deal.
"The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk and capital," Willis Towers Watson chief executive John Haley said.
"This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value."
The move sees the unification of two highly complementary businesses into a technology-enabled global platform that is more relevant and responsive to client needs, Aon said.
"This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors," Aon chief executive Greg Case said.
"Our world-class expertise across risk, retirement and health will accelerate the creation of new solutions that more efficiently match capital with unmet client needs in high-growth areas like cyber, delegated investments, intellectual property, climate risk and health solutions."
In terms of governance, Haley will take on the role of executive chair, with the business to be run by Case and Aon chief financial officer Christa Davies. The board of directors will be made up of a proportional number of current Aon and Willis Towers Watson directors.
Aon expects annual pre-tax synergies and other cost reductions of $1.2 billion (US$800 million) after three years.
This will be the result of consolidating business and central support functions and consolidation of infrastructure related to technology, real estate and third-party providers.
The transaction is subject to approval by shareholders and is expected to close in the first half of 2021.