Aon completes move to Ireland to ensure 'stability and capital flexibility' post-Brexit
Re/insurance broker Aon has completed the move of the jurisdiction of incorporation for its parent company to Ireland from the UK, without any impact on its rating outlook.
The move will allow the London-based firm to remain within the European Union single market and maintain a "stable corporate structure and capital flexibility" after Brexit.
Each ordinary share of the prior parent company, Aon plc in the UK, has been exchanged for one ordinary share of the new parent company, also named Aon plc and domiciled in Ireland.
Shares of the new Irish-domiciled parent company began trading on April 1 under the symbol AON.
Earlier in October 2019, the firm stated that "Aon will maintain the firm’s operating company headquarters at the Leadenhall Building in London and the firm’s commitment to the UK, and the important London insurance market remains unchanged and unrivalled."
Meanwhile, Moody's Investors Service has confirmed that the rating outlook for Aon remains unchanged at stable following the move.
The ratings reflect its global market presence, diversification across clients, products and regions, and expertise in providing risk, retirement and health solutions to middle-market, national and global clients, the agency said.
According to Moody's, Aon has improved its EBITDA and free cash flow in recent years through acquisitions, organic growth and a three-year restructuring plan that was completed by the end of 2019.
In March 2020, Aon agreed to combine with insurance broker Willis Towers Watson in an all-stock transaction that valued WLTW at about $30 billion. The combination of Aon and WTW will be the world's largest insurance brokerage and consulting firm, with pro forma revenue of $20 billion and pro forma net income of $3.6 billion based on 2019 results.
The merger will strengthen their respective market positions in the US, the UK and Europe, while expanding their respective product capabilities across their major business lines of commercial risk, retirement, health, reinsurance and data and analytics. However, Moody's noted, offsetting these benefits are the execution and integration risks, including potential attrition among producers and clients, in combining two global organisations.
Aon and WTW expect to complete their merger in the first half of 2021, pending approvals from their shareholders and regulators.
