Willis Group And Towers Watson To Merge In $18 Bln Deal

(RTTNews) - Willis Group Holdings (WSH) and Towers Watson (TW) announced that they signed a definitive merger agreement by which they will combine in an all-stock merger of equals transaction.

Based on the closing prices of Willis and Towers Watson common stock on June 29, 2015, the implied equity value of the transaction is about $18 billion.

The transaction has been unanimously approved by the Board of Directors of each company. The combined company will be named Willis Towers Watson.

Upon completion of the merger, Willis shareholders will own approximately 50.1% and Towers Watson shareholders will own approximately 49.9% of the combined company on a fully diluted basis.

As per the terms of 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.

Combination is expected to result in $100 million - $125 million in cost savings to be fully realized within three years of closing, primarily related to the elimination of duplicate corporate costs and economies of scale, in addition to increased efficiencies.

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 Officer and Dominic Casserley will be President and Deputy CEO. The new company's board will consist of 12 directors total - six nominated by Willis and six by Towers Watson, including Towers Watson's and Willis' current CEOs. Additionally, Roger Millay will be CFO.

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