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Willis Group and Towers Watson announce US$18 billion merger


June 30, 2015   by Canadian Underwriter


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Willis Group Holdings and Towers Watson announced on Tuesday the signing of a merger agreement worth about US$18 billion.

The combined company will have about 39,000 employees in more than 120 countries

The signing of the definitive merger agreement, based on the closing prices of Willis’ and Towers Watson common stock on June 29, was unanimously approved by the board of directors of each company.

The combined company will be named Willis Towers Watson.

Upon closing of the transaction, which is expected by Dec. 31, James McCann will become chairman, John Haley will be chief executive officer and Dominic Casserley will be president and deputy CEO, Willis said in a press release. The new company’s board will consist of 12 directors in total – six nominated by Willis and six by Towers Watson, including Towers Watson’s and Willis’ current CEOs. Additionally, Roger Millay will be CFO.

Casserley and Gene Wickes from Towers Watson have been chosen to oversee the integration team. After closing, the combined company will also maintain its domicile in Ireland.

The combined company – an integrated global advisory, broking and solutions provider that will serve a broad range of clients in existing and new business lines – will have about 39,000 employees in more than 120 countries. It will also have a pro forma revenue of about US$8.2 billion and adjusted/underlying EBITDA of over US$1.7 billion for the 12 months ending Dec. 31, 2014, the release said.

Currently, Willis Group Holdings plc is a global risk advisory, re/insurance broking, and human capital and benefits firm, with more than 18,000 employees in over 400 offices. Towers Watson is a global professional services company with more than 15,000 associates around the world, offering consulting, technology and solutions in the areas of benefits, talent management, rewards and risk and capital management.

The merger is expected to result in US$100-125 million in cost savings, to be fully realized within three years of closing, primarily related to the elimination of duplicate corporate costs and economies of scale, in addition to increased efficiencies, the release said. Upon completion of the merger, Willis shareholders will own approximately 50.1% and Towers Watson shareholders will own approximately 49.9% of the combined company on a fully diluted basis.

“We will advise over 80% of the world’s top-1000 companies, as well as having a significant presence with mid-market and smaller employers around the world,” said Casserley, current Willis CEO, in the release. “The rationale for the merger is powerful – at one stroke, the combination fast-tracks each company’s growth strategy and offers a truly compelling value proposition to our clients.”

John Haley, current chairman and CEO of Towers Watson, added that the combination of “two highly compatible companies with complementary strategic priorities, product and service offerings, and geographies” will deliver value. In particular, the merger will help deliver solutions “across a broader client base, including accelerating penetration of our Exchange Solutions platform into the fast growing middle-market,” Haley said. “Our organizations share a client-first mentality,” he added.

The release pointed to the following additional benefits of the merger:

• Powerful Global Platform for Profitable Growth: Drives incremental growth opportunity through increased ability to rely upon Towers Watson’s relationships to increase Willis’ penetration in the large U.S. P&C corporate market;

• Accelerates Growth in Exchange Market: Provides opportunity to accelerate growth in the exchange market by bringing Towers Watson’s Exchange Solutions offering to Willis’ middle-market relationships;

• Expands International Profile: Combined entity will both internationalize Towers Watson’s exchange offering and serve more multinationals around the world, given the expanded capabilities and footprint; and

• Strong Financial Profile: Combined entity will have a strong balance sheet and financial profile, with a diversified revenue mix across segments, geographies and clients, and significant cash flow generation.


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