Last year, Aon and Willis Towers Watsonpulled the plug on a proposed combination less than 24 hours afterpreliminary talks leaked. (Credit: Brent Lewin/Bloomberg)

(Bloomberg) — Aon Plc agreedto buy Willis Towers Watson Plc in an almost $30 billiontransaction that combines the world's second- and third-biggestinsurance brokerages.

The all-stock deal, the largest ever for the industry, comesalmost exactly a year after previous talks between the twocompanies broke down. Aon CEO Greg Case and Chief Financial OfficerChrista Davies will lead the combined company, according to astatement.

Related: Aon is said to weigh bid for $23B rival WillisTowers Watson

Brokerages, which help connect businesses looking for coveragewith insurers, have been aggressively merging to diversify, boostcommissions and serve customers who increasingly want to deal withfewer intermediaries. Marsh & McLennan Cos.. the largestbroker, bought Jardine Lloyd Thompson Group Plc last year for $5.7billion. Willis Towers was itself formed in 2016 in an $8.9 billionmerger.

The Aon deal "combines two highly complementary businesses intoa technology-enabled global platform that is more relevant andresponsive to client needs," the companies said in thestatement.

Last year, Aon and Willis Towers Watson pulled the plug on aproposed combination less than 24 hours after preliminary talksleaked. A Bloomberg News report thrust the discussions into thepublic, making it difficult for Aon to move forward because it wasstill refining the terms of its offer, people familiar with thematter said at the time.

Irish regulations forced the disclosure of early-stage talkslast year. Aon said at the time that it reserved the right within12 months to set aside its announcement that it wasn't intending topursue a deal. While Aon was restricted from reaching out to Willisfor at least a year, Willis was free to approach its pursuer,according to a person familiar with the matter.

Earnings impact

The deal will add to earnings in the first full year of thecombination, and provide annual pretax synergies and costreductions of about $800 million by the third year, according tothe statement. Willis Towers CEO John Haley will become executivechairman.

"We're very confident in Aon's ability to build shareholdervalue from this combination over time," analysts at Keefe, Bruyette& Woods said in a note to clients.

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