Market Overview

Willis Group And Towers Watson Merge To Form $18 Billion Company


Shares of Willis Group Holdings PLC (NYSE: PLC) spiked higher by more than 5 percent Tuesday morning after the company announced it signed a definitive merger agreement under which it will combine with Towers Watson & Co (NASDAQ: TW) in an all-stock merger of equals transaction.

Willis Group shareholders will own approximately 50.1 percent and Towers Watson investors will own approximately 49.9 percent of the combined company which will be named Willis Towers Watson.

Willis Group estimates the merger will deliver "significant" potential to enhance long-term shareholder value through incremental revenue growth. The company also expects to realize cost synergies of $100 million to $125 million, and greater corporate efficiencies.

The implied equity value of the transaction is approximately $18 billion.

According to a Willis Group press release, the combination of the two firms "brings together two highly complementary businesses to create an integrated global advisory, broking, and solutions provider to serve a broad range of clients in existing and new business lines."

"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, Chairman and Chief Executive Officer of Towers Watson said in the press release.

"We see numerous opportunities to enhance our growth profile by offering integrated solutions that leverage Willis' global distribution network and superb risk advisory and re/insurance broking capabilities to deliver a more robust set of analytics and product solutions across a broader client base, including accelerating penetration of our Exchange Solutions platform into the fast growing middle-market."

"These are two companies with world-class brands and shared values," Dominic Casserley, Willis CEO, said in the same press 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.

"Together we will help our clients achieve superior performance through effective risk, people and financial management. 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."

The transaction is expected to close by the end of 2015 and is subject to approval by both Willis and Towers Watson shareholders in addition to customary closing conditions, including regulatory approvals.

Posted-In: brokers Global Advisory John Haley merger Towers WatsonNews M&A Movers


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