[Editor’s note: The following story is an updated version of a piece that was posted on Tuesday, reporting on Aon’s confirmation that it was considering a merger with Willis Towers Watson.]
What a difference a day makes.
On Tuesday, Aon confirmed in a statement that it is in the “early stages of considering an all-share business combination with Willis Towers Watson,” adding that there’s “no certainty that any transaction will take place nor as to the form or terms on which any transaction might be pursued.” The comment came on the heels of a Bloomberg story earlier in the day that cited unnamed sources who said Aon was considering acquiring Willis.
It didn’t take the company long to give some weight to the phrase “no certainty.”
On Wednesday, the company did an about-face, issuing the following statement:
“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. News of that consideration subsequently became public and Aon was required to issue a statement because Willis Towers Watson is an Irish company and is subject to Irish regulatory requirements. As a result of media speculation, those regulations required Aon to make the disclosure at a very early stage in the consideration of a potential all-share business combination. Aon today confirms that it does not intend to pursue this business combination.”
So, at least for now, it would appear there’s no merger in the offing.
Had the merger moved forward, it would have made the combined entity the world’s largest insurance brokerage, surpassing Marsh & McLennan, parent of Mercer, in revenue size. It would also bring together two of the biggest names in HR and benefits consulting.
The acquisition would have come roughly three years after Willis Group’s merger with Towers Watson.
Industry analyst Josh Bersin notes that in the HR market, Aon and Willis Towers Watson have complementary and some duplicate offerings. “Aon has focused on outsourcing and value-added service delivery and Towers Watson has focused on value-added services and products,” he says.
Had the two merged, Bersin says, the potential for synergy could have been enormous, but the link-up would have required a lot of internal organizational transformation.
On Wednesday, Willis Towers Watson shares were trading down roughly 6.5 percent in the early afternoon, while Aon was up 4.5 percent. In contrast, a day earlier, Willis Towers Watson shares closed up 5.2 percent, while Aon fell 7.9 percent.