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LONDON-Sedgwick Group P.L.C. and Willis Corroon Group P.L.C., the two biggest brokers yet to be asked to the megamerger dance that their peers are engaged in, have refused to comment on speculation that they are in merger discussions with each other.

In addition, Sedgwick has declined to comment on rumors that it also is the target of a due diligence review by potential suitor Aon Group Inc.

After analysts' comments that a union of Sedgwick and Willis is almost inevitable if they want to remain competitive in the post-consolidation brokerage environment, a British business newspaper reported last week that executive directors of the two brokers were involved in a merger discussion.

However, a Sedgwick spokes-woman in London last week would only say it was not the company's policy to comment on market rumors. Willis Corroon's press spokesman made a similar comment: "There is nothing we can say on that. It's just a press story."

Sedgwick and Willis Corroon are not only the two largest British brokers, but before the latest round of mergers and acquisitions were ranked third- and fifth-largest in the world, respectively, based on gross revenues. If they were to merge, their combined gross revenues would be about $2.7 billion, putting them in third place globally behind J&H Marsh & McLennan Inc. and Aon Group Inc.

Even before the latest round of broker mergers, Sedgwick Chairman Sax Riley had maintained that there would be some consolidation among the six biggest insurance brokers and that Sedgwick would be open to a merger with the right partner.

Willis Corroon, however, has maintained that it wants to remain independent, though when asked about possible mergers, Chief Executive Max Taylor recently said, "We never rule anything in or out."

Julianne Jessup, stock analyst in London for UBS Ltd., said that a deal between Sedgwick and Willis Corroon "looks ever more likely." She said that the recent mergers by M&M and Aon with other brokers "will put further pressure on both Sedgwick and Willis to re-evaluate their respective strategies."

Tony Silverman of NatWest Securities in London also has said that "Sedgwick and Willis in the long term will have to talk to each other."

Recently, Chicago-based fund manager David Herro disclosed that his Oakmark International fund had acquired a 3.1% stake in Sedgwick.

The fact that he had taken his shareholding to just above the 3% level, at which shareholders must disclose their interests under British securities laws, prompted speculation by stock analysts that Mr. Herro would use his position to encourage other shareholders in Sedgwick and Willis Corroon to force a merger.

Meanwhile, another rumor floating around the markets last week was that Aon had posted an $800 million bond to perform due diligence on Sedgwick in consideration of a possible merger.

A spokesman for Aon in London declined to comment on the speculation.