What is the nature of the agreement between Aon and Willis Towers Watson?

Aon plc (Aon UK) and Willis Towers Watson Public Limited Company (WTW) have entered into a Business Combination Agreement to combine their businesses. The transaction is structured as a scheme of arrangement under Irish law, resulting in WTW becoming a subsidiary of a new Irish parent company, Aon Ireland.

When is this combination expected to be completed?

The combination is anticipated to be completed in the first half of 2021, subject to the satisfaction or waiver of all relevant conditions, including shareholder and regulatory approvals.

Are there any significant termination fees associated with this agreement?

Yes, Aon UK would be obligated to pay WTW a fee of $1 billion if the Business Combination Agreement is terminated under specific circumstances related to the failure to obtain certain antitrust and competition clearances that are conditions to closing.

AON 8-K: Material Agreements

Q: What will WTW shareholders receive in the transaction?

Under the terms of the Business Combination Agreement, WTW shareholders will receive 1.08 newly issued Class A ordinary shares of Aon Ireland for each ordinary share of WTW they hold.

Summary

Aon plc filed an 8-K on March 10, 2020, to announce a material definitive agreement for a business combination with Willis Towers Watson Public Limited Company (WTW). The transaction, structured as a court-sanctioned scheme of arrangement under Irish law, will result in WTW becoming a wholly owned subsidiary of Aon Ireland, a newly formed Irish parent company. Under the terms, WTW shareholders will receive 1.08 newly issued Class A ordinary shares of Aon Ireland for each ordinary share of WTW held. This combination is expected to be completed in the first half of 2021, subject to various conditions including shareholder and regulatory approvals. The agreement also outlines the integration of leadership, with four WTW board members, including the current WTW CEO, joining the Aon Ireland board. The WTW CEO will assume the role of Executive Chairman of Aon Ireland. The filing details conditions for the scheme's implementation, potential termination rights for both parties, and a $1 billion termination fee payable by Aon UK under specific antitrust-related circumstances. An Expenses Reimbursement Agreement and irrevocable director undertakings are also noted.

Key Highlights

1Aon plc (Aon UK) entered into a Business Combination Agreement with Willis Towers Watson Public Limited Company (WTW) on March 9, 2020.
2The transaction will be implemented as a court-sanctioned scheme of arrangement under Irish law, making WTW a wholly owned subsidiary of Aon Ireland.
3WTW shareholders will receive 1.08 Aon Ireland Class A ordinary shares for each WTW ordinary share.
4The combined entity will be headquartered in Ireland, with Aon UK transitioning to Aon Ireland as the parent company.
5The expected completion date for the combination is the first half of 2021.
6Four WTW directors, including the CEO, will join the Aon Ireland board, with the WTW CEO becoming Executive Chairman focused on growth and innovation.
7Aon UK could owe WTW a $1 billion termination fee if the agreement terminates due to certain antitrust/competition clearance failures.

Aon plc 8-K Report, Material Agreement (Mar 10, 2020)

Summary

Key Highlights

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