Proxy advisory firms Institutional Shareholder Services Inc. (ISS) and Glass Lewis & Co. have recommended the shareholders of both Aon and Willis Towers Watson (WTW) to vote in favour of their combination.
In an independent report dated August 7th, 2020 ISS found that “the strategic rationale is sound” and subsequently recommended shareholders of both re/insurance brokers to vote for the proposed combination.
Aon confirmed in March of this year that it will combine with rival broker WTW through a definitive agreement to combine in an all-stock transaction. The merger is expected to result in cost synergies of $800 million and be accretive to both adjusted EPS and free cash flow.
According to ISS, which recommends shareholders on which way to vote on matters like M&A, “AON and WLTW have complementary businesses and client bases across geographies and client segments, which may provide the potential for revenue upside.”
Following the ISS recommendation, in its August 10th, 2020 independent report, fellow proxy advisory firm Glass Lewis, said: “We find the proposed merger is strategically and financially compelling and structured in a reasonable manner which impacts an acceptable valuation and ownership split for WLTW shareholders.”
On July 8th, 2020 Aon and WTW filed a definitive joint proxy statement with the SEC, which provides details on voting and logistics scheduled to take place on August 26th, 2020 at the extraordinary special meetings of the shareholders of both companies as ordered by the High Court of Ireland.
Since the filing of the joint proxy statement, Aon and WTW filed a proxy supplement which includes “Supplemental Disclosures” designed to ward off legal challenges delaying the deal.
The deal is expected to close in the first half of next year and upon closing, WTW shareholders will receive 1.08 Aon shares in exchange for each WTW share they held immediately prior to the closing.
The Board of Directors of both Aon and WTW recommends that their respective shareholders vote FOR all proposals at the extraordinary general meeting.
