Willis Group Holdings plc (NYSE:WSH), the global risk advisory,
re/insurance broking, and human capital and benefits firm,
announced today that it has made a firm offer to acquire the
remaining 70 per cent that it does not currently own of Gras
Savoye, the leading French insurance broker, and to accelerate
closing. The purchase price of the 70 per cent stake, including the
repayment of outstanding third party debt (estimated to be €40
million), is approximately €550 million.
The Gras Savoye board of directors has received the offer
positively. The transaction is expected to close on or around
December 31, 2015, subject to customary regulatory consents and
approvals, and acceptance of the firm offer by Gras Savoye's
shareholders, which can only occur after consultation with Gras
Savoye's workers' councils.
Uniting both companies would enhance our proposition as a
multinational risk advisory, re/insurance broking, and human
capital and benefits firm, with an extensive and largely
wholly-owned international footprint. Together, the two firms
combined would have scale through a presence in 131 countries, of
which 84 would be wholly-owned operations. Gras Savoye would
bring:
- A strong footprint in France, where Gras Savoye is the largest
broker and enjoys a leading position in the mid-market sector,
which holds further growth opportunities.
- The expertise and reach to serve multinationals, including in
France, which is home to 31 of the Fortune Global 500 - a number
that ranks it fourth globally and first in Europe.
- Access to high-growth economies and insurance markets,
including Central and Eastern Europe, the Middle East, and a
comprehensive network of 42 offices in 31 countries across
Africa.
- Strong property and casualty product capabilities and employee
benefit products.
Combining the two complementary businesses would build on a
working relationship between Gras Savoye and Willis of 40 years.
The two companies know each other well, and this would be expected
to facilitate a smooth and relatively quick operational integration
process.
Gras Savoye's expertise in key sectors and prominence in
high-growth markets would be aligned and connected with Willis's
specialisms and global capabilities, creating distinctive product
and service offerings that add significant value for clients.
Following the completion of the transaction, Gras Savoye would
become part of the Willis Group, while maintaining its name and
brand in key markets, including France. Paris would become one of
our global centres of excellence.
Dominic Casserley, CEO of Willis Group, said:
"Our clients see us as the multinational risk adviser and broker of
choice. In this next phase of our longstanding partnership, Willis
and Gras Savoye would deepen further our client service offering
and strengthen our reach and expertise. We would help clients in
both fast-growing and developed markets to capture opportunities.
This deal would unite two complementary global networks, the
analytical expertise of both organisations, and two values-based
operating models in order to bring more to our clients."
Patrick Lucas, Chairman of Gras Savoye, said:
"The board of Gras Savoye is delighted to receive the offer from
Willis Group. We have worked together for forty years, and this
offer is the logical next step in that relationship. Together we
would be stronger and could present a truly impressive worldwide
offering to clients, as well as professional development
opportunities to our colleagues at Gras Savoye and at Willis. Gras
Savoye would be elevated to the position of being one of the
leading risk advisory and broking firms in the world."
Tim Wright, CEO of Willis International, said:
"Together, Willis and Gras Savoye would deliver more connected,
specialised capabilities to our clients of today and tomorrow. As
the world's fifth largest insurance market, France is not only a
major market in its own right, but also the home of many
world-class multinationals. The combination of Willis and Gras
Savoye would allow us to bring to these companies the full range of
our global expertise in France and around the world."
François Varagne, CEO of Gras Savoye, said:
"This combination would plug Gras Savoye directly into Willis's
world-class specialist industry knowledge, diversifying our
offering to both clients and carriers. Colleagues across Gras
Savoye would be inspired to find themselves part of a major
multinational operation where they would have many opportunities to
develop their talents."
Transaction Terms
The firm offer accelerates the expected closing of the
transaction and the transfer of shares to on or around December 31,
2015, from June 2016. Willis has initiated this acceleration in
order to bring the vision and benefits of the union to clients more
quickly, and to consolidate Gras Savoye's full year results for
2016.
In addition to this firm offer, however, Willis has issued
notice preserving its right under an existing shareholder agreement
to acquire the remaining shares in Gras Savoye in June 2016, should
the firm offer not be accepted. In that event, the purchase price
would be determined by a formula under that agreement.
Financial Background
For the year ended December 31, 2014, under US GAAP, Gras
Savoye's net revenue was approximately €370 millioni, and their
earnings before interest, taxes, depreciation and amortization
(EBITDA) were approximately €65 million.
Given the complementary nature of the two businesses, we
anticipate that the primary source of value creation would be
revenue synergies associated with joint incremental growth.
The proposed acquisition of Gras Savoye is expected to be $0.06
to $0.08 dilutive on reported earnings per share (EPS) in 2016,
mildly dilutive in 2017, and accretive in 2018. However, excluding
the non-cash impact of amortization expense associated with the
transaction, we expect the transaction to be accretive in the range
of $0.13 to $0.17 per share in 2016.
Notes to Editors
The History of the Relationship between Willis, Gras
Savoye and Astorg Partners
Willis was a key member of a pioneering international network
started by a US-based broker in the 1960s, which was named the
UNISON network in 1982. Gras Savoye joined this network in 1975,
but had worked with Willis on projects prior to that. Gras Savoye
has been an associate company of Willis since 1997, when Willis
acquired a 33 per cent ownership interest, which it gradually
increased to 49 per cent. In November 2009, the capital of Gras
Savoye was reorganised and Astorg Partners became a shareholder.
Willis, the family shareholders of Gras Savoye and Astorg Partners
each held 31.8 per cent stakes in the holding company. The 4.5 per
cent stake was held by a group of Gras Savoye managers and
employees. As part of this reorganisation and a subsequent
agreement, Willis obtained the option to purchase by 2016 the
remaining shares it does not own. Since the reorganisation in 2009,
the shareholders have jointly supported the management in its
efforts to improve company performance.
About Willis
Willis Group Holdings plc is a global risk advisory,
re/insurance broking, and human capital and benefits firm. With
roots dating to 1828, Willis operates today on every continent with
more than 18,000 employees in over 400 offices. Willis offers its
clients superior expertise, teamwork, innovation and market-leading
products and professional services in risk management and
transfer.
Our experts rank among the world's leading authorities on
analytics, modelling and mitigation strategies at the intersection
of global commerce and extreme events. Find more information at our
website, www.willis.com, our leadership journal, Resilience, or our
up-to-the-minute blog on breaking news, WillisWire. Across
geographies, industries and specialisms, Willis provides its local
and multinational clients with resilience for a risky world.
About Gras Savoye
Gras Savoye, founded in 1907, is the leading insurance broker in
France. For more than 100 years, the Group has been growing by
placing the client first. Gras Savoye is a solid partner for French
companies with a comprehensive regional and international network.
Gras Savoye, as an insurer of thousands of companies of all sizes,
is involved in national and international projects in many
different business sectors: personal insurance, property insurance,
civil liability, construction, automotive and many other specialist
areas. Every day, Gras Savoye insures 500,000 vehicles and provides
healthcare protection for more than 2.2 million people worldwide.
The Group employs 3,900 people and has a presence in over 50
countries and, with its partner Willis, supports clients in 131
countries.
About Astorg Partners
Astorg is an independent private equity fund management company,
specializing in European mid-market buyouts, with total funds under
management of over €2 billion. Astorg seeks to partner with
successful and entrepreneurial management teams, to acquire
businesses - very often family-owned - with attractive growth
prospects, which Astorg supports through the provision of
experienced governance and adequate capital. Astorg enjoys a
distinct entrepreneurial culture, a long-term shareholder
perspective, and a lean decision-making body enhancing its
reactivity. Although a multi-sector investor, Astorg has developed
solid industry expertise in healthcare, business-to-business
professional services and niche industrial companies selling
differentiated, often technology-driven, products. Astorg has
offices in Paris, London and Luxembourg; plus Senior Advisors based
in Holland, Switzerland and Germany. Visit www.astorg-partners.com
for more information.
Caution Concerning Forward-Looking
Statements
We have included in this document 'forward-looking statements'
within the meaning of Section 27A of the Securities Act of 1933,
and Section 21E of the Securities Exchange Act of 1934, which are
intended to be covered by the safe harbours created by those laws.
These forward-looking statements include information about possible
or assumed future results of our operations. All statements, other
than statements of historical facts that address activities, events
or developments that we expect or anticipate may occur in the
future, including such things as projected financial results and
our increased scale, our strong footprint in France, our ability to
access high-growth economies and insurance markets, our new global
network, and our plans and references to future successes, are
forward-looking statements. Also, when we use the words such as
'expect', 'estimate', or similar expressions, we are making
forward-looking statements.
There are important uncertainties, events and factors that could
cause our actual results or performance to differ materially from
those in the forward-looking statements contained in this document,
including: the risk that the offer may not be accepted by Gras
Savoye and the acquisition may not be consummated, or that the
transaction may not be consummated in the desired accelerated
timeframe; the risk that conditions to the completion of the
transaction may not be satisfied; the risk that a regulatory
approval that may be required in order to complete the acquisition
is not obtained or is obtained subject to conditions that are not
anticipated; the risk that we may not fully realize the anticipated
benefits from the acquisition of Gras Savoye, or that the benefits
may take longer to realize than expected, including the anticipated
scale and revenue synergies of the combined businesses, as well as
our ability to access potential high-growth markets; the risk that
we may not be able to effectively integrate Gras Savoye into our
business; the risk that we may not be able to retain key Gras
Savoye employees; the risks associated with operating in foreign
markets, including being subject to foreign regulations that may
adversely affect our business and being subject to other laws and
regulations that apply to our operations and conduct around the
world; the impact of any regional, national or global political,
economic, business, competitive, market, environmental or
regulatory conditions on our global business operations; and the
impact of current global economic conditions on our results of
operations and financial condition.
More detailed information about the above and other factors is
available ''Risk Factors'' section included in Willis' Form 10-K
for the year ended December 31, 2014 and our subsequent
filings with the Securities and Exchange Commission. Copies are
available online at http://www.sec.gov or www.willis.com.
Although we believe that the assumptions underlying our
forward-looking statements are reasonable, any of these
assumptions, and therefore also the forward-looking statements
based on these assumptions, could themselves prove to be
inaccurate. In light of the significant uncertainties inherent in
the forward-looking statements included in this document, our
inclusion of this information is not a representation or guarantee
by us that our objectives and plans will be achieved.
Our forward-looking statements speak only as of the date made
and we will not update these forward-looking statements unless the
securities laws require us to do so. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed
in this document may not occur, and we caution you against unduly
relying on these forward-looking statements.
i The €566 million of revenue recorded by Gras Savoye in its
press release dated April 15, 2015, is gross of ceded
commissions.
Contact: |
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Media: |
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Paul Platt (Willis) |
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+44 20 3124 7659 |
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Paul.Platt@willis.com |
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Céline Meslier (Gras Savoye) |
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+33 (0)1 41 3 55 02 |
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celine.meslier@grassavoye.com |
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Investors: |
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Peter Poillon |
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+1 212 915 8084 |
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Peter.Poillon@willis.com |