Willis and Towers Watson Aim to Merge in $18 Billion All-Share Deal

30 Jun 2015 | Author: | No comments yet »

Willis Group and Towers Watson agree $18bn merger.

LONDON — The insurance broker and risk management advisory firm Willis Group Holdings said on Tuesday that it had agreed to an $18 billion all-share merger with the professional services firm Towers Watson.Under the deal, which has been approved by both boards, Towers Watson shareholders will get 2.6490 Willis shares for each share held as well as a one-time cash dividend of $4.87 a share.

The deal would create a professional services, risk management and insurance brokerage firm with more than $8 billion in annual revenue and about 39,000 employees in more than 120 countries, the companies said. The merger of the two brokers comes amid a flurry of consolidation in the insurance industry as companies look to increase scale and bolster revenue amid falling rates and increased competition. The combined company, of which Willis will own 50.1 percent, will be named Willis Towers Watson and be domiciled in Ireland. “We view this as a defensive move by both companies,” said Eamonn Flanagan, an analyst at Shore Capital Group Ltd. in a note to clients. “To us, Willis appears to be struggling to deliver on its own cost savings plans without damaging its own franchise and is losing key personnel. It is expected to close by the end of the year. “This is a tremendous combination of two highly compatible companies with complementary strategic priorities, product and service offerings, and geographies that we expect to deliver significant value for both sets of shareholders,” John Haley, the chairman and chief executive of Towers Watson, said in a news release. “We see numerous opportunities to enhance our growth profile.” Mr. The Sears Tower in Chicago, one of the tallest buildings in the world, was renamed the Willis Tower in 2009 after the company signed a long-term lease for space in the building.

Perella Weinberg Partners and the law firm Weil, Gotshal & Manges advised Willis, while Towers Watson was advised by Bank of America Merrill Lynch and the law firm Gibson, Dunn & Crutcher.

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