Combination offers clients a broader range
of advice, analytics, specialty capabilities and solutions covering
benefits; brokerage and advisory; talent and rewards; exchange
solutions; and risk and capital management across all segments and
geographies
Creates integrated global platform to drive
long-term growth and market share gain in traditional and new
businesses
Merger delivers significant potential to
enhance long-term shareholder value through incremental revenue
growth, expected cost synergies of $100-125 million, and greater
corporate efficiencies
Willis Group Holdings (NYSE:WSH) and Towers Watson (NASDAQ:TW)
today announced the signing of a definitive merger agreement under
which the companies 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 approximately $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.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20150630005494/en/
Upon completion of the merger, terms of which are detailed
below, 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.
The combination of Willis and Towers Watson brings together two
highly complementary businesses to create an integrated global
advisory, broking, and solutions provider to serve a broad range of
clients in existing and new business lines. The combined company
will have approximately 39,000 employees in over 120 countries, and
pro forma revenue of approximately $8.2 billion and
adjusted1/underlying2 EBITDA of over $1.7 billion for the twelve
months ended December 31, 2014.3
John Haley, Chairman and Chief Executive Officer of 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. We see
numerous opportunities to enhance our growth profile by offering
integrated solutions that leverage Willis’ global distribution
network and superb risk advisory and re/insurance broking
capabilities to deliver a more robust set of analytics and product
solutions across a broader client base, including accelerating
penetration of our Exchange Solutions platform into the fast
growing middle-market. 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.”
Mr. Haley continued, “Importantly, our organizations share a
client-first mentality and a focus on providing services and
solutions that consistently exceed clients’ expectations. As we
bring these two companies together, we are confident associates
across both organizations will enjoy increased development
opportunities as part of a stronger and more global growth
company.”
Dominic Casserley, Willis CEO, said, “These are two companies
with world-class brands and shared values. 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.”
Mr. Casserley continued, “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.”
Transaction Delivers Key Strategic and Financial
Benefits
- Powerful Global Platform for
Profitable Growth: Drives incremental growth opportunity
through increased ability to rely upon Towers Watson’s
relationships to increase Willis’ penetration in the large U.S.
P&C corporate market.
- Accelerates Growth in Exchange
Market: Provides significant opportunity to accelerate growth
in the exchange market by bringing Towers Watson’s best-in-class
Exchange Solutions offering to Willis’ significant middle-market
relationships.
- Expands International Profile:
Combined entity will both internationalize Towers Watson’s exchange
offering and serve more multinationals around the world, given the
expanded capabilities and footprint.
- Strong Financial Profile:
Combined entity will have a strong balance sheet and financial
profile, with a diversified revenue mix across segments,
geographies and clients, and significant cash flow generation.
- Highly Achievable Cost
Synergies: Combination is expected to result in $100-125
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. These savings are incremental to current cost saving
and operational improvement initiatives already underway at each
company.
Transaction Structure
Pursuant to 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. 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.
Willis shareholder ValueAct Capital – owner of approximately
10.3 percent of the common stock of Willis – has entered into an
agreement to vote its shares in favor of the transaction.
Management, Governance and Integration
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.
Dominic Casserley and Gene Wickes from Towers Watson have been
chosen to oversee the Integration Team.
After closing, the combined company will maintain its domicile
in Ireland and significant presence in major markets around the
world.
Approvals and Time to Close
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.
Advisors
Willis received legal advice from Weil, Gotshal & Manges LLP
and Matheson, and financial advice from Perella Weinberg Partners,
LP; Towers Watson received legal advice from Gibson, Dunn &
Crutcher and financial advice from BofA Merrill Lynch.
Conference Call and Webcast Details
Willis and Towers Watson will host a joint conference call and
webcast today at 8:00 a.m. Eastern Time (U.S.) to discuss the
proposed merger. Participants will include Towers Watson Chairman
and CEO and CFO, and Willis’ CEO and CFO. The general public is
invited to listen to the call by dialing (855) 631-5368 (U.S.
domestic), or (330) 863-3283 (international), conference ID
75130475, or via a live audio webcast through the Investor
Relations sections of the Willis and Towers Watson websites. For
those unable to listen to the live broadcast, a replay will be
available on both websites or by dialing (855) 859-2056 (U.S.
domestic), or (404) 537-3406 (international), conference ID
75130475, beginning approximately two hours after the event. The
replay of the conference call will be available through July 14,
2015. The webcast and a podcast will be archived and available
online on each company’s website for at least 30 days following the
call.
A copy of the investor presentation will be made available on
both companies’ investor relations websites.
Additional information regarding the transaction can be found on
willisandtowerswatson.mergerannouncement.com.
About Willis Group
Willis Group Holdings plc is a leading 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 Towers Watson
Towers Watson is a leading global professional services company
that helps organizations improve performance through effective
people, risk and financial management. With 15,000 associates
around the world, the company offers consulting, technology and
solutions in the areas of benefits, talent management, rewards, and
risk and capital management. Learn more at towerswatson.com.
# # #
Responsibility Statement
The directors of Willis accept responsibility for the
information contained in this document other than that relating to
Towers Watson, the Towers Watson Group and the directors of Towers
Watson and members of their immediate families, related trusts and
persons connected with them. To the best of the knowledge and
belief of the directors of Willis (who have taken all reasonable
care to ensure that such is the case) the information contained in
this document for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
The directors of Towers Watson accept responsibility for the
information contained in this document relating to Towers Watson,
the Towers Watson Group and the directors of Towers Watson and
members of their immediate families, related trusts and persons
connected with them. To the best of the knowledge and belief of the
directors of Towers Watson (who have taken all reasonable care to
ensure that such is the case) the information contained in this
document for which they accept responsibility is in accordance with
the facts and does not omit anything likely to affect the import of
such information.
Important Information About the
Transaction and Where to Find It
This document shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Willis plans to file with the SEC a Registration Statement on
Form S-4 in connection with the transaction. Willis and Towers
Watson plan to file with the SEC and mail to their respective
shareholders a Joint Proxy Statement/Prospectus in connection with
the transaction. The Registration Statement and the Joint Proxy
Statement/Prospectus will contain important information about
Willis, Towers Watson, the transaction and related matters.
Investors and security holders are urged to read the
Registration Statement, the Joint Proxy Statement/Prospectus and
other related documents carefully when they are available.
Investors and security holders will be able to obtain free
copies of the Registration Statement, the Joint Proxy
Statement/Prospectus and other related documents filed with the SEC
by Willis and Towers Watson through the web site maintained by the
SEC at www.sec.gov or by visiting the investor relations sections
of Willis’ or Towers Watson’s websites at www.Willis.com or
www.towerswatson.com.
Participants in the
Solicitation
Willis and Towers Watson, and their respective directors and
executive officers, may be deemed to be participants in the
solicitation of proxies in respect of the transactions contemplated
by the merger agreement. Information regarding the directors and
executive officers of Willis, and their direct or indirect
interests in the transaction, by security holdings or otherwise, is
contained in Willis’s Form 10-K for the year ended December 31,
2014 and its proxy statement filed on April 17, 2015, which are
filed with the SEC. Information regarding Towers Watson’s directors
and executive officers, and their direct or indirect interests in
the transaction, by security holdings or otherwise, is contained in
Towers Watson’s Form 10-K for the year ended June 30, 2014 and its
proxy statement filed on October 3, 2014, which are filed with the
SEC. A more complete description will be available in the
Registration Statement and the Joint Proxy
Statement/Prospectus.
Forward Looking
Statements
This document contains forward-looking statements that involve a
number of risks and uncertainties. Statements that are not
historical facts, including statements regarding expectations,
hopes, intentions or strategies regarding the future are
forward-looking statements. Forward-looking statements are based on
Willis or Towers Watson management’s beliefs, as well as
assumptions made by, and information currently available to, them.
Because such statements are based on expectations as to future
financial and operating results and are not statements of fact,
actual results may differ materially from those projected. Willis
and Towers Watson undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise. The risks and uncertainties which
forward-looking statements are subject to include, but are not
limited to: the ability to consummate the proposed transaction; the
ability to obtain requisite regulatory and shareholder approvals
and the satisfaction of other conditions to the consummation of the
proposed transaction on the proposed terms and schedule; the
ability of Willis and Towers Watson to successfully integrate their
respective operations and employees and realize synergies and cost
savings at the times, and to the extent, anticipated; the potential
impact of the announcement or consummation of the proposed
transaction on relationships, including with employees, suppliers,
customers and competitors; changes in general economic, business
and political conditions, including changes in the financial
markets; significant competition that Willis and Towers Watson
face; compliance with extensive government regulation; the combined
company’s ability to make acquisitions and its ability to integrate
or manage such acquired businesses; and other risks detailed in the
“Statement Regarding Forward-Looking Information,” “Risk Factors”
and other sections of Willis’s and Towers Watson’s Form 10-K and
other filings with the Securities and Exchange
Commission.
1 Towers Watson adjusted EBITDA defined as net income
(attributable to common stockholders) adjusted for discontinued
operations, net of tax, provision for income taxes, interest, net,
depreciation and amortization, transaction and integration
expenses, and other non-operating income excluding income from
variable interest entity.
2 Willis underlying EBITDA defined as net income (attributable
to Willis Group Holdings) adjusted for net income attributable to
non-controlling interests, interest in earnings of associates, net
of tax, income tax charges, interest expense, restructuring
charges, depreciation, amortization and other non-operating
income.
3 Financials based on calendar year 2014 results, pro forma for
the merger, completion of Willis’ acquisitions of Miller and Gras
Savoye (pending), and full year run rate contributions for Willis’
acquisitions of IFG, Max Matthiessen and Charles Monat.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150630005494/en/
Willis:Investors:Peter Poillon, +1
212 915 8084peter.poillon@willis.comorMedia:Miles Russell,
+44 (0) 7903 262118 / +44 (0) 20 3124 7446orStephen Cohen, + 1 212
886 9332stephen.cohen@teneostrategy.comorTowers Watson:Investors:Aida Sukys,
+1 703-258-8033aida.sukys@towerswatson.comorMedia:Sard
Verbinnen & CoMichael Henson/Conrad Harrington, +44 (0) 20 3178
8914orBryan Locke/Jenny Gore, +1 312 895 4700