Aon has announced it will acquire Willis Towers Watson to create an $US80 billion ($120.39 billion) broking giant.

The possible deal was flagged a year ago, before Aon backed away. But the companies now say the combination is “a natural next step”.

The combined business will operate under the Aon brand and be led by Aon CEO Greg Case, but there is not yet any information on how the merger will affect teams in Australia and New Zealand.

Aon’s Australia CEO is James Baum, while Willis Towers Watson is led locally by Head of Australasia Simon Weaver.

A statement from the two companies announced the “definitive agreement to combine in an all-stock transaction with an implied combined equity value of approximately $US80 billion”.

“The combination of Willis Towers Watson and Aon is a natural next step in our journey to better serve our clients in the areas of people, risk and capital,” Willis Towers Watson CEO John Haley said.

Mr Case says the deal will increase innovation and deliver “better outcomes for all stakeholders”.

The transaction is subject to shareholder and regulatory approval, but is expected to close in the first half of next year.