Dive Brief:

• Professional services firm Aon agreed to acquire rival firm Willis Towers Watson (WTW), the companies announced March 9, potentially creating a company with a combined equity value of around $80 billion. Aon acquired WTW for nearly $30 billion in stock, The Wall Street Journal reported. The new company will trade as Aon.
• The deal is one of the biggest in the professional services industry ever made, according to Bloomberg, and is the biggest deal of 2020 worldwide to date, the Journal said, even with stock market volatility wiping out $3 billion in value for WTW over the weekend.
• Speculation about a potential merger between the two began last year, but Aon in a March 2019 statement said "it [was] not pursuing business combination" with WTW at the time.

Dive Insight:

The brokerage and advisory space has been no stranger to mergers in recent years, due in part to a shifting market that demands more from those firms. Willis and Towers Watson made a huge splash in 2015 when the two companies announced they would merge into WTW; that storyline continues with the WTW acquisition.

Aon, too, has been shifting its focus toward its insurance and risk management businesses since at least 2017, offloading its benefits outsourcing business, Aon Hewitt, to Blackstone Group early that year.  

The soon-to-be combined companies aim to share their expertise in growing fields of risk, including cybersecurity, intellectual property, climate change and health solutions, they said in a press release: "The transaction unites firms that share a belief in the power of data-driven insights to create new sources of client value."

"When you think about what's going on with clients, volatility in the world is increasing," Aon Chief Executive Officer Greg Case told Bloomberg. "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."

Fittingly, Gartner's 2019 report on emerging risks noted that "accelerating privacy regulation" and "cloud computing" remained large concerns for global employers — but both were dwarfed by the talent shortage, which has prompted skill gaps in key sectors, such as cloud computing, privacy regulation and cybersecurity.