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Aon PLC’s acquisition of rival Willis Towers Watson PLC is still expected to close in the first half of 2021, even though the European Union has extended its review of the deal until the end of July, Willis’ top executive said Thursday.
CEO John Haley, who was speaking on a call with analysts to discuss the brokerage’s first-quarter results, declined to comment on whether divestitures required for approval by regulators might exceed the $1.8 billion limit set in the merger document.
He acknowledged that some staff have left the brokerage since the deal was announced but called them “isolated instances” that have not had a material effect and said that retention bonuses totaling $400 million would be paid at or after the closing of the deal.
Aon’ proposed $30 billion acquisition of Willis, which was announced more than a year ago, is being scrutinized by competition regulators in the European Union and elsewhere who have reportedly demanded that various divestitures be agreed before the purchase is approved.
In particular, Willis’ reinsurance brokerage unit and operations in various EU countries, including France and Germany, are expected to be sold.
Mr. Haley said press reports on the divestitures have some “elements of truth” to them but can also be “wildly inaccurate.”
Meanwhile, Willis reported first-quarter revenue of $2.59 billion, a 5% increase over the same period last year and up 4% on an organic basis, which foreign exchange fluctuations and other nonrecurring elements.
Revenue for its main commercial insurance brokerage unit increased to $810 million in revenue, up 5% on an organic basis. North America revenue grew 6% with strong renewals across all regions.
The investment, risk and reinsurance business unit reported 4% organic growth
Net income for the first quarter more than doubled to $736 million.
Michael Burwell, the broker’s chief financial officer, said “as a general matter, the COVID-19 pandemic did not have a materially adverse impact on our overall financial results in 2020 or in the first quarter of 2021.”