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10. Gallagher secured major boost to its reinsurance business

Posted On: Dec. 28, 2021 7:25 AM CST


The disintegration of Aon PLC’s planned purchase of Willis Towers Watson PLC had a chain reaction that scuttled various other deals that had been contingent on the completion of the merger, but the biggest of the secondary deals eventually still happened.

In May, the two brokers agreed to sell various units to satisfy antitrust concerns raised by various regulators. The most prominent of those deals was the proposed sale of most of Willis’ reinsurance brokerage business to Arthur J. Gallagher & Co.

The story detailing the agreement, which was negotiated 100% virtually, was the 10th most read story on Business Insurance’s website in 2021.

The deal was hailed as a good buy for Gallagher that would transform it from a relatively modest-sized reinsurance brokerage into a major player in the market.

But when the Aon/Willis merger was called off in July, after U.S. regulators raised other objections, the original agreement between Gallagher and Willis unwound, too. Still keen to do the reinsurance deal, they continued negotiating, and a new agreement was forged in August, albeit at a higher price.

Regulators again investigated the deal but later approved it with Gallagher paying $3.25 billion, rising to a possible $4 billion, for Willis Re in December.

The acquisition raises Gallagher’s annual reinsurance revenue to about $1 billion from $130 million.