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Willis Towers (WLTW) Boosts Aerospace Business With Buyout

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Willis Towers Watson plc WLTW recently acquired Aerosure. This marks its efforts to strengthen its presence in Asia and Australasia.

Sydney-based Aerosure is Asia-Pacific’s specialist aerospace insurance broker. It is a leading aviation industry specialist and has contributed to the growth and development of the aerospace community in Australia and New Zealand. It serves the insurance and risk needs of the aviation industry.

The endeavor to acquire Aerosure is in tandem with Willis Towers Watson’s growth strategy of working with high-performing and high-potential businesses in specific markets and industry sectors. Thus, the addition of Aerosure will help the acquirer grow and provide additional services and solutions to clients across Asia and Australasia.

Willis Towers Watson is the leading risk adviser to the global airline industry and offers innovative aviation insurance solutions to its clients. Its Global Aerospace Practice supports the insurance needs of the aviation industry including manufacturers and aircraft maintenance, airports, airside, ground handlers and refuellers. It provides a wide range of capabilities and essential services to address the long-term aerospace risk management requirements.

Also, with the aviation industry gradually getting back in action after the commotion caused by the pandemic, the recent acquisition seems to be time opportune as it will further strengthen the acquirer’s aerospace business.

Despite the fallout of the merger between Willis Towers and Aon plc in July 2021, the insurance broker remains focused on investing in both organic and inorganic growth opportunities across its brokerage and consulting businesses. The merger was announced on Mar 9, 2020. In June 2021, the Department of Justice filed an antitrust lawsuit anticipating that the merger could threaten competition.

Other Acquisitions in the Same Space

Given the insurance industry’s adequate capital level, players like Marsh & McLennan Companies MMC, Apollo Global Management APO and Athene Holdings ATH are pursuing strategic mergers and acquisitions.

Marsh & McLennan’s unit Marsh McLennan Agency has acquired InSource Insurance Group LLC to boost its growing organization. Marsh & McLennan has made numerous purchases within its different operating units that enabled it to enter new geographies, expand within the existing locations, foray into new businesses, develop new segments and specialize within its current businesses.

Athene Holdings and Apollo Global Management have agreed to buy a majority interest in Aqua Finance for $1 billion from Blackstone Tactical Opportunities to boost Apollo’s $80 billion annual run rate of asset origination across commercial and consumer lending platforms. Athene boasts an impressive inorganic growth, which has been driven by several buyouts and block reinsurance transactions with several companies. This insurer expects that its inorganic growth channel will continue to be an important driver in the future.

Athene and Apollo have shared a partnership since the former was established in 2009. Apollo currently holds 34% stake in Athene. Apollo is a leading global investment manager with assets under management of approximately $ $481 billion as of Sep 30, 2021 in credit, private equity, and real assets funds.

Price Performance

Willis Towers Watson currently carries a Zacks Rank #3 (Hold). Shares have gained 10.2% in a year, compared with the industry’s increase of 26.9%. Efforts to ramp up the company’s growth profile and capital position should help the stock bounce back. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Zacks Investment Research

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Shares of Marsh & McLennan, Athene and Apollo Global have gained 44.6%, 84% and 45.2%, respectively, in the same time frame.


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