Aon has reached an agreement to buy Willis Towers Watson for about $30 billion in an all-stock deal, the companies announced.

Under the terms of the deal, Willis Towers Watson shareholders would receive 1.08 Aon shares for each Willis Towers Watson share, representing a 16.2% premium to Willis Towers Watson’s closing price on March 6.

The deal would combine the world’s second and third-largest insurance brokers and would create a combined firm larger than Marsh & McLennan, which is currently the largest broker by revenue.

“The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk, and capital,” Willis Towers Watson chief executive officer John Haley said in a statement.

The companies said the deal will result in pre-tax synergies and other cost reductions of $800 million by the third full year. It will produce more than $10 billion in shareholder value, net of $2.0 billion in one-time transaction, retention, and integration costs, they said.

Aon CEO Greg Case said the combined firm would be better equipped to deal with intellectual property and cybersecurity risks.

“When you think about what’s going on with clients, volatility in the world is increasing,” Case said in an interview. “All the traditional risks, just the traditional basket, is actually bigger than ever before, and then now you’ve got all the non-traditional stuff kicking in.”

Aon will keep its operating headquarters in London. John Haley will become executive chairman of the combined company, which will be led by Greg Case and Aon chief financial officer Christa Davies.

Haley had been set to retire next year.

Last March, Aon confirmed it was considering an all-stock offer for Willis Towers Watson before announcing it had scrapped the idea.

The transaction is subject to the approval of the shareholders of both Aon Ireland and Willis Towers Watson, as well as other customary closing conditions, including required regulatory approvals.

The deal is expected to close in the first half of 2021.

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