Could another major brokerage snap up Willis Towers Watson?

Aon’s deal to acquire Willis Towers Watson may have fallen through, but another major player may still be interested in snapping up the firm.

Arthur J. Gallagher could seek to acquire all or parts of Willis Towers Watson, including Willis Re, according to a report by Bloomberg Intelligence.

Gallagher had a US$3.6 billion deal to buy several WTW businesses – a deal which was contingent on the Aon deal going through. However, dislocation at WTW and uncertainty about the CEO could mean the broker is open to working with Gallagher, Bloomberg Intelligence said.

The initial deal between Gallagher and WTW was agreed upon in order to alleviate European Commission concerns, and would have added an estimated 9% to 11% to 2020 earnings per share.

“The biggest risk in our view was a culture clash, but Gallagher has successfully integrated large European businesses in the past,” said Matthew Palazola, senior industry analyst at Bloomberg Intelligence.

According to the Bloomberg Intelligence report, Gallagher could seek to acquire Willis Re, described as the crown jewel of the previous agreement with an estimated US$750 million in revenue.

If Willis Towers Watson remains independent, it likely will want to retain Willis Re, Bloomberg Intelligence said. However, if Gallagher acquires the business, it will become the world’s third-largest reinsurance broker. Gallagher is currently the fifth largest.

Willis Re was seen as a regulatory stumbling block in the Aon deal, as it would have created a duopoly in the reinsurance market with Marsh McLennan. That wouldn’t be a concern in a potential deal with Gallagher, Bloomberg Intelligence said.