Aon to snap up smaller rival Tower Willis in $30bn deal

The combined business, which will be called Aon and will maintain operating headquarters in London, will have an implied equity value of around $80bn. The deal is expected to generate annual pre-tax synergies and other cost reductions of $800m within three years. The savings would allow the enlarged company to "continue significant investment in innovation and growth," Aon said in a statement.

John Haley, chief executive of Willis Towers, said the tie up was the "natural next step in our journey to better serve our clients in the areas of people, risk and capital".

Greg Case, chief executive at Aon, added: "This combination will create a more innovative platformer, capable of delivering better outcomes for stakeholders, including clients, colleagues, partners and investors."

Haley will become executive chairman of the combined business, with Case becoming chief executive and Aon chief financial officer Christa Davies assuming the role post merger.

Aon is the world’s second largest insurance broker and Willis Towers the third. The world’s number one is Marsh & McLennan, which last year completed its $5.6bn acquisition of the UK’s Jardine Lloyd Thompson.

Both Aon and Willis Towers are listed in New York. Under the terms of the deal, Willis Towers shareholders will receive 1.08 new Aon Ireland shares for each Willis Towers share, which represents a 16.2% premium to Willis Towers' closing share price on 6 March.