Global professional services provider Towers Watson and Willis Group Holdings, the risk advisory, re/insurance broking, human capital and benefits specialist, have signed a definitive merger agreement.
The combined firm, which will be known as Willis Towers Watson, will have around 39,000 staff across 120 countries. It will continue to be domiciled in Ireland.
The merger will create an integrated global advisory, broking and solutions provider. In addition to providing an enhanced international profile and delivering corporate efficiencies, the merger is expected to generate cost synergies of $100-125 million within three years.
Following the completion of the merger, John Haley, currently chairman and chief executive officer (CEO) of Towers Watson, will serve as CEO of the newly combined firm and Dominic Casserley, currently CEO of Willis, will become president and deputy CEO. James McCann will become chairman of Willis Towers Watson and Roger Millay will be chief financial officer.
The two organisations will combine through an all-stock merger of equals transaction, with an implied equity value of approximately $18 billion, based on the closing prices of Willis and Towers Watson common stock on 29 June 2015. Towers Watson shareholders will have a 49.9% stake in the combined organisation and Willis shareholders will own the remaining 50.1%.
The transaction is expected to close by the end of 2015, subject to regulatory and shareholder approvals. The board of directors at both Towers Watson and Willis have approved the merger transaction.
Haley 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.”
Casserley added: “We look forward to bringing Towers Watson’s innovative solutions to our clients alongside our broking and advisory services.
“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.”