Last year, Aon and Willis Towers Watson pulled the plug on a proposed combination less than 24 hours after preliminary talks leaked. (Credit: Brent Lewin/Bloomberg) Last year, Aon and Willis Towers Watson pulled the plug on a proposed combination less than 24 hours after preliminary talks leaked. (Credit: Brent Lewin/Bloomberg)

(Bloomberg) — Aon Plc agreed to buy Willis Towers Watson Plc in an almost $30 billion transaction that combines the world’s second- and third-biggest insurance brokerages.

The all-stock deal, the largest ever for the industry, comes almost exactly a year after previous talks between the two companies broke down. Aon CEO Greg Case and Chief Financial Officer Christa Davies will lead the combined company, according to a statement.

Brokerages, which help connect businesses looking for coverage with insurers, have been aggressively merging to diversify, boost commissions and serve customers who increasingly want to deal with fewer intermediaries. Marsh & McLennan Cos.. the largest broker, bought Jardine Lloyd Thompson Group Plc last year for $5.7 billion. Willis Towers was itself formed in 2016 in an $8.9 billion merger.

The Aon deal “combines two highly complementary businesses into a technology-enabled global platform that is more relevant and responsive to client needs,” the companies said in the statement.

Last year, Aon and Willis Towers Watson pulled the plug on a proposed combination less than 24 hours after preliminary talks leaked. A Bloomberg News report thrust the discussions into the public, making it difficult for Aon to move forward because it was still refining the terms of its offer, people familiar with the matter said at the time.

Irish regulations forced the disclosure of early-stage talks last year. Aon said at the time that it reserved the right within 12 months to set aside its announcement that it wasn’t intending to pursue a deal. While Aon was restricted from reaching out to Willis for at least a year, Willis was free to approach its pursuer, according to a person familiar with the matter.

Earnings impact

The deal will add to earnings in the first full year of the combination, and provide annual pretax synergies and cost reductions of about $800 million by the third year, according to the statement. Willis Towers CEO John Haley will become executive chairman.

“We’re very confident in Aon’s ability to build shareholder value from this combination over time,” analysts at Keefe, Bruyette & Woods said in a note to clients.

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