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P Pitch Archive Stock pitches across investing competitions
← Winter 2021

Aon plc

AON position long Wilmot Kidd and John Hill, Central Securities

Thesis

Aon is acquiring Willis Towers Watson, and we see this as a strong opportunity given the cash flow characteristics of insurance brokers. We believe that the cost synergies from this acquisition could exceed management's estimates, potentially doubling free cash flow per share over the next four to six years.

Did it work?

failed confidence: high

The thesis rested entirely on the Aon–Willis Towers Watson merger closing and its cost synergies roughly doubling free cash flow per share over four to six years. That premise was decisively invalidated: the U.S. DOJ sued to block the deal, and Aon terminated the acquisition in July 2021, paying WTW a $1 billion break fee, so the synergy-driven FCF thesis can never play out. With no price data available, the verdict rests on this core thesis event failing, which is a decisive break regardless of elapsed time.