Willis Towers Watson is a British global multinationalrisk management, insurance brokerage and advisory company. The firm has roots dating to 1828 and is the third largest insurance broker in the world. On 9 March 2020, Aon announced its acquisition of the company for nearly $30 billion in an all-stock deal that creates the world’s largest insurance broker.
Overview
Willis Towers Watson operates in more than 140 countries and has a workforce of more than 45,000 employees. It has joined the Hedge Fund Standards Board and follows the voluntary code of standards of best practice endorsed by its members.
The merging companies announced the merger on 30 June 2015 in a deal valued at $18 billion. Willis Towers Watson would maintain its domicile in Irelandand list on the New York Stock Exchange. Later in 2015 the company moved its domicile to Virginia in the US and delisted from The NYSE and relisted on The NASDAQ. Willis Group exercised its right to acquire the remainder of Gras Savoye and agreed to purchase 85% of Miller, the leading London independent wholesale insurance broker.
Criticism
Critics to the deal pointed out that the original offer would not be beneficial to Towers Watson shareholders as they would receive package of shares and a special cash dividend that is valued at $125.13 per share. This value was 9.3% lower than the trading price of Towers Watson's stock was at the time of the announcement of the deal. The revised offer in November increased the value to $130.26 per share, which was still lower than the trading price of Towers Watson shares at the time of the announcement. The deal also gives Willis Group shareholders more control despite the firm having a lower market capitalization compared to Towers Watson. In an open letter, investment adviser Driehaus Capital Management urged Towers Watson shareholders to vote against a proposed merger. Driehaus argued that Towers Watson was worth between 39% and 53% more as a standalone company than by merging with Willis Group. It was also reported that Towers Watson CEO John Haley had disposed of his shares in the company in early March 2015 while the merger negotiations were ongoing. On 18 November 2015, the board of Towers Watson failed to get enough investor support for the deal, with only 40% of shareholders voting in favor of the proposed merger with Willis Group. This rejection led to Willis Group increasing its special cash dividend for Towers Watson shareholders to USD $10 per share. This revised offer was approved by Towers Watson shareholders on 11 December 2015.
Completion
The merger was closed on 5 January 2016 once all regulatory approvals were received. Willis Towers Watson publicly announced their name change on 5 January. Willis Group shareholders owned 50.1% while those of Towers Watson shareholders owned 49.9% of the combined company. On completion, Towers Watson CEO, John Haley, became the CEO, Willis Group CEO, Dominic Casserley, became the President and Deputy CEO while Willis Group Chairman, James McCann, became the chairman of the merged group with the twelve board seats shared equally between the two companies. For the first fiscal quarter of 2016, the first earnings release since the merger completed, Willis Towers Watson reported that merger and acquisition costs remain significant and are likely to total between $150 million and $175 million. Three years after the merger, the company reported that cost-saving synergies have exceeded expectations, reaching $175 million versus previous estimates of $100-$125mn. On 9 March 2020, Aon announced its planned acquisition of Willis Towers Watson for nearly $30 billion in an all-stock deal that creates the world’s largest insurance broker
