Arthur J. Gallagher & Co. has confirmed that its agreement to acquire certain assets of Willis Towers Watson (WTW) has been terminated owing to the collapse of the $30 billion combination of Aon and WTW.
As Aon and WTW attempted to get their proposed merger over the line amid an array of competition concerns, the pair entered into an agreement to sell Willis Re and certain other WTW assets to Gallagher, for a total consideration of $3.57 billion.
The agreement helped the pair alleviate some antitrust concerns in Europe, with the European Commission eventually giving the deal the go-ahead, albeit dependant on full compliance with a substantial set of commitments offered by Aon.
For Gallagher, the arrangement was viewed as a positive and analysts noted that it was acquiring a significant package of business for a low price.
At the time, the company’s Chairman, President and Chief Executive Officer (CEO) J. Patrick Gallagher, Jr., said that the purchase of Willis Re would take his firm’s data and analytics capabilities to new heights.
Furthermore, as news circulated that potentially Aon and WTW would be required to make more divestments to get their deal over the line, Gallagher said it was “wide open” to take on more business.
Unfortunately for Gallagher, the agreement was always dependent on the completion of the mega-merger between Aon and WTW.
Gallagher says that in conjunction with the termination, it plans to exercise the special optional redemption feature of its $650 million tranche of 10-year senior notes issued on May 20th, 2021.
The brokerage is also exploring opportunities to deploy its excess cash position through its merger program as well as a possible share repurchase.