June 30, 2015 – Willis Group Holdings Plc, the third-largest insurance broker, agreed to merge with Towers Watson & Co. to add consulting operations and help take on larger U.S. rivals.
Shareholders of the broker will own 50.1 percent of the combined company, which will be domiciled in Ireland, lowering taxes for U.S.-based Towers Watson. Investors of the consulting company will get 2.649 Willis shares and a one-time cash dividend of $4.87 for each share they own, the companies said Tuesday. Based on the broker’s closing price Monday, the deal values Towers Watson at about $8.7 billion.
Marsh & McLennan Cos. and Aon Plc, the two largest brokers, also offer consulting services to tighten relationships with commercial clients who are seeking to manage employee benefits as well as buy insurance. Aon expanded in 2010 with the purchase of Hewitt LLC.
Upon completion, Willis Chairman James McCann will become chairman of the combined group and Towers Watson CEO John Haley, 65, becomes CEO. Casserley will be deputy CEO. The new board will consist of six directors nominated by Willis and six by Towers Watson including the two CEOS.
The deal values Towers Watson at about $125 a share, Sarah Dewitt, an analyst with JPMorgan Chase & Co., said on the call. That compares with Monday’s closing price of $137.98. The consulting firm slipped 2.4 percent $134.74 at 10:15 a.m. in New York trading, while Willis advanced 5.7 percent to $47.98. The combined company will have a market value of about $18 billion.
Click on the external link below to review the entire article: