Insurance and reinsurance broking giant Aon has scrapped plans to make a bid for its slightly smaller rival Willis Towers Watson.

The news ends 24 hours of fervent speculation that has sent Aon’s share price tumbling while investors have scurried to buy up stock in Willis. 

A deal would have created the world’s largest insurance and reinsurance broker. But just a day after Aon revealed that it was in the early stages of preparing a bid for the rival firm, the London-headquartered firm publically dismissed those plans.

Stringent disclosure rules in Ireland had forced Aon to make the plans public after a report by Bloomberg.

“As a result of media speculation, those regulations required Aon to make the disclosure at a very early stage in the consideration of a potential all-share business combination,” Aon said in a statement.

But the firm went on: “Aon today confirms that it does not intend to pursue this business combination.”

Nevertheless, the revelation that Aon was looking at an acquisition the size of Willis, which would have been the largest deal ever done in the insurance broking space, lends further weight to the theory that there is more consolidation to come between insurance intermediaries.

In September, Marsh revealed that it had inked a deal to buy its smaller rival JLT for $5.6bn, in a move that - at the time - cemented Marsh’s position as the world’s largest broker.

But a tie up of Willis and Aon would have put paid to that. Together, the two firms booked revenues of $19.3bn last year, well ahead of the roughly $17bn combined turnover of Marsh and JLT.

Aon has been on the look out for a deal for long time and executives at the firm are thought to have been annoyed not to have been offered an opportunity to bid for JLT, following years of rumours about a potential tie up between the two firms.

Nevertheless, when news of Aon’s interest in Willis emerged, Aon investors balked at the idea. Shares in Aon tumbled by 7.8 percent on news of a potential offer. Meanwhile, Willis stock surged by more than 5 percent, valuing the company at $23.7bn.

Both Willis and Aon have made a play to grow the scope of their businesses and redefine themselves more broadly as professional services firms in recent years.

Willis did that through an $8.7bn deal to acquire human resources consulting firm Towers Watson in 2015. Meanwhile, Aon has grown its offering significantly and encouraged its brokers to cross-sell services provided by other parts of the business through an initiative it has dubbed “Aon United”.

Aon revealed its plans to table a deal for Willis in a regulatory filing on Tuesday.

“The company confirms that it is in the early stages of considering an all-share business combination with Willis Towers Watson,” the statement said.

However, it noted that plans were still in their infancy. “The company emphasizes that, at this point, its evaluation of a potential transaction is at a preliminary stage and there can be no certainty that any transaction will take place nor as to the form or terms on which any transaction might be pursued,” Aon said.

Those plans have now been put on ice.