Towers Watson merges with Willis in £11.4bn deal

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Towers Watson has merged with insurance broker Willis Group in an $18bn (£11.4bn) deal to create a wide-ranging global advisory, broking, and solutions provider.

The all-stock merger will result in Willis shareholders owning approximately 50.1% and Towers shareholders owning approximately 49.9% of the combined company, to be called Willis Towers Watson.

The firms announced today that the boards of each firm had unanimously approved the deal, which they said would result in "cost synergies" of up to $125m, and greater corporate efficiencies.

The combined company will have approximately 39,000 employees in over 120 countries, and pro forma revenue of approximately $8.2bn.

John Haley, chairman and chief executive at Towers Watson said: "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."

He said the board saw numerous opportunities to grow the business by offering integrated services and leveraging Willis' global distribution network.

Haley said: "We also expect to realize substantial efficiencies by bringing our two organizations together, and have a well-defined integration roadmap to capitalize on identified savings, ensure the strongest combination of talent and practices, and realize the full benefits of the merger for all of our stakeholders."

Dominic Casserley, chief executive of Willis said: "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 opportunity to deliver significant savings to our growing middle market client base with Towers Watson's market-leading private exchange platform is particularly attractive."

Under the merger Towers Watson shareholders will receive 2.6490 Willis shares for each Towers Watson share. Towers Watson shareholders will also receive a one-time cash dividend of $4.87 per Towers Watson share pre-closing.

Subject to Willis shareholder approval, Willis expects to implement a 2.6490 for one reverse stock split, so that each one Willis share will be converted into 0.3775 Willis Towers Watson shares.

If the reverse stock split is approved, Towers Watson shareholders will receive one share of Willis Towers Watson for each Towers Watson share. The merger is not conditioned on Willis shareholder approval of the reverse stock split.

Upon closing of the transaction, James McCann will become Chairman, John Haley will be chief executive and Dominic Casserley will be president and deputy chief executive.

The board of the new company, which will be domiciled in Ireland will consist of 12 directors - six nominated by Willis and six by Towers Watson

The transaction is expected to close by December 31, 2015, subject regulatory approvals, and approval by both Willis and Towers Watson shareholders.

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