Aon plc (AON) and Willis Towers Watson (WLTW) have agreed to combine in an all-stock deal with an implied combined equity value of approximately $80BN. Each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each ordinary share. Aon shareholders will continue to own the same number of ordinary shares in the combined company. Upon completion, Aon shareholders will own approximately 63 percent and Willis Towers Watson shareholders will own approximately 37 percent of the combined company.

The deal marks the latest stage in the long-running consolidation of the insurance broking industry and throws up a challenge to Marsh & McLennan, the world’s largest. It comes a year after Marsh & McLennan completed the acquisition of UK based Jardine Lloyd Thompson in a $5.6 BN deal.

Aon said there would be $800 MN of synergies from the combination, which the two companies had first discussed more than a year ago. The company said that the deal would be accretive to adjusted earnings per share in the first full year after the acquisition.

John Haley, CEO of Willis Towers Watson shared in a press release, "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." He further said "This transaction accelerates that journey by providing our combined teams the opportunity to drive innovation more quickly and deliver more value."

"This combination will create a more innovative platform capable of delivering better outcomes for all stakeholders, including clients, colleagues, partners and investors," said Aon CEO Greg Case. "Our world-class expertise across risk, retirement and health will accelerate the creation of new solutions that more efficiently match capital with unmet client needs in high-growth areas like cyber, delegated investments, intellectual property, climate risk and health solutions."

The combined company will be named Aon and will maintain its operating headquarters in London, United Kingdom. John Haley will take on the role of Executive Chairman with a focus on growth and innovation strategy. The combined firm will be led by Greg Case and Aon Chief Financial Officer Christa Davies, along with a highly experienced and proven leadership team that reflects the complementary strengths and capabilities of both organizations. The Board of Directors will comprise proportional members from Aon and Willis Towers Watson's current directors.

Under the terms of the agreement unanimously approved by the Boards of Directors of both companies, each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing. Upon completion of the combination, existing Aon shareholders will own approximately 63 percent and existing Willis Towers Watson shareholders will own approximately 37 percent of the combined company on a fully diluted basis.

Aon anticipates that the transaction will provide annual pre-tax synergies and other cost reductions of $800 million by the third full year of combination, thereby allowing the firm to continue significant investment in innovation and growth.

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