A $24 Billion Insurance Deal Dies in Less Than 24 Hours

(Bloomberg) -- It’s not often that you hear about a $24 billion deal brewing in the financial services industry. It’s even rarer that it goes from confirmation to breakup in less than a day.

On Tuesday afternoon, Aon Plc confirmed a Bloomberg News report that it was considering a tie-up with Willis Towers Watson Plc -- a rival with a $24 billion market value -- in a deal that could have transformed the insurance brokerage industry. By Wednesday morning, the firm said it changed its mind, blaming Irish regulations that forced it to confirm the talks at a very early stage once reports had leaked.

The two companies had held preliminary discussions and Aon was preparing to submit a formal offer in the coming weeks, people familiar with the plan had told Bloomberg. Aon had said it was considering an all-share offer, a proposal that would’ve gotten more expensive after news of their deliberations sent their shares down 7.8 percent and their would-be target’s stock up 5.2 percent by the end of Tuesday.

Analysts at Wells Fargo & Co. also pointed out that regulatory issues were bound to be a big overhang for a deal as Aon and Willis are the second- and third-largest insurance brokers by revenue.

"Regulatory issues among others, including accretion, lost business, etc could have impacted its decision not to pursue a deal at this time," the bank said in a note Wednesday.

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