Market News

Aon Bags EU Regulator’s Conditional Nod for $30B Willis Deal — Report

Professional services firm Aon Plc. (AON) has received conditional approval from the European Union (EU) antitrust regulators for its $30 billion bid to acquire Willis Towers Watson, according to a report by Reuters.

The conditional approval requires Aon to divest key parts of Willis’ business to rival Arthur J. Gallagher & Co. (AJG).

Aon offers a suite of financial risk-mitigation products, which include health insurance plans, pension administration and insurance. The U.K.-based Willis Towers Watson provides advisory, insurance brokerage and risk management services.

The EU competition enforcer said, “The commitments will strengthen Gallagher in its capabilities in reinsurance and commercial risk brokerage and improve its footprint in the European Economic Area.”

On June 16, The U.S. Department of Justice (DoJ) filed a lawsuit to stop Aon from acquiring Willis and said the acquisition would reduce competition and lead to higher prices. (See Aon stock chart on TipRanks)

William Blair analyst Adam Klauber recently reiterated a Buy rating on Aon but did not assign a price target. In a research note to investors, the analyst said, “The DoJ’s lawsuit could result in near-term uncertainty for Aon, but in-line valuation and good near-term prospects should limit downside.”

Overall, the stock has a Moderate Buy consensus rating based on 3 Buys, 3 Holds and 1 Sell. The average Aon price target of $261.80 implies 10.8% upside potential. The company’s shares have gained 20% over the past year.

According to TipRanks’ Smart Score rating system, Aon scores an 8 out of 10. This suggests that the stock is likely to outperform market averages.

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