British professional services firm Aon is putting together a bid to purchase its competitor Willis Tower Watson to form the world’s largest insurance broker and consultancy.
Bloomberg was the first to report that Aon has held early talks with London-based Willis Towers Watson and is preparing to submit a bid for the company in the next couple weeks.
Aon confirmed the potential bid a statement that said it is in the “early stages of considering an all-share business combination with Willis Towers Watson.”
“The Company emphasizes that, at this point, its evaluation of a potential transaction is at a preliminary stage and there can be no certainty that any transaction will take place nor as to the form or terms on which any transaction might be pursued,” Aon said in a statement.
If the transaction goes through the deal would rank as the largest merger in insurance brokerage history, combining Aon, the world’s second biggest brokerage, with Willis Towers Watson, which ranks third.
Aon has a market capitalization of around $38 billion, compared to Willis Towers Watson’s $23.5 billion valuation.
The insurance brokerage industry has seen heavy consolidation in recent years driven by large capital resources, technological innovation and aging company principals.
Willis Towers Watson was itself formed in 2016 after Towers Watson purchased the Willis Group in an $18 billion deal.
If it proceeds, the deal is expected to receive heavy scrutiny from U.K. regulators which has taken a closer look at potential anti-competitive practices in the brokerage industry in recent years.
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