Willis Towers Watson

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Willis Towers Watson Public Limited Company
Public limited company
Traded asNASDAQWLTW
S&P 500 component
PredecessorsWillis Group
Towers Watson
Founded5 January 2016; 2 years ago (2016-01-05)
HeadquartersLondon, United Kingdom
Key people
John Haley (CEO),
James McCann (chairman)
ProductsRisk management, Insurance brokerage, Advisory & Actuarial services, Human Capital & Benefits
Number of employees
43,000
WebsiteWillis Towers Watson

Willis Towers Watson is a global multinational risk management, insurance brokerage and advisory company. The firm has roots dating to 1828 and is the third largest insurance broker in the world.[1]

Overview[edit]

Willis Towers Watson operates in more than 140 countries and has a workforce of more than 40,000 employees.[1] It has joined the Hedge Fund Standards Board and follows the voluntary code of standards of best practice endorsed by its members.[2]

History[edit]

Willis Towers Watson was formed as a merger of equals between London based Willis Group Holdings plc and Arlington, VA based Towers Watson & Co.[3]

Merger process[edit]

Rationale[edit]

The merging companies announced the merger on June 30, 2015[4] in a deal valued at $18 billion.[3] Willis Towers Watson would maintain its domicile in Ireland lowering taxes and 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[edit]

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.[5] This value was 9.3% lower than the trading price of Towers Watson's stock as at the time of the announcement of the deal.[6] 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.[5]

In an open letter, investment adviser Driehaus Capital Management urged Towers Watson shareholders to vote against a proposed merger.[7] Driehaus argued that Towers Watson was worth between 39% and 53% more as a standalone company than by merging with Willis Group.[8] 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.[9]

On November 18, 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.[10] 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 December 11, 2015.[11]

Completion[edit]

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.[12][13] Willis Group shareholders owned 50.1% while those of Towers Watson shareholders owned 49.9% of the combined company.[14]

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.[15]

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.[16]

Three years after the merger, the company reported that cost-saving synergies have exceeded expectations, reaching $175 million versus previous estimates of $100-$125mn.[17]

References[edit]

  1. ^ a b "Overview". Willis Towers Watson. Retrieved 30 September 2018.
  2. ^ Hedge Fund Standards Board. "HFSB Founders & Core Supporters". Retrieved 27 September 2016.
  3. ^ a b "Willis and Towers Watson to merge in $18B deal". CNBC. Reuters Thomson Reuters. 2015-06-30. Retrieved 2015-09-07.
  4. ^ "Willis Group and Towers Watson Announce Merger to Create Leading Global Advisory, Broking and Solutions Firm" (PDF). Willis and Towers Watson. June 30, 2015. Retrieved 2015-09-07.
  5. ^ a b Hoffman, Liz; Samuel, Juliet (July 1, 2015). "Willis-Towers Watson: A Merger of Equals—Not Exactly". The Wall Street Journal. News Corp. Retrieved September 15, 2015.
  6. ^ "Towers Watson & Co. (TW) - Historical Prices". Yahoo! Finance. Yahoo!. 2015-06-29. Retrieved 2015-09-15.
  7. ^ Hofmann, Mark A. (2015-09-17). "Towers Watson shareholder advises against merger with Willis". Business Insurance. Crain Communications. Retrieved 2015-09-15.
  8. ^ Hoffman, Liz (2015-09-15). "Investor Moves to Rally Votes Against Towers Watson Deal". The Wall Street Journal. News Corp. Retrieved 2015-09-17.
  9. ^ Hoffman, Liz (2015-09-27). "Towers Watson CEO Sold Stock Before Big Deal". The Wall Street Journal. News Corp. Retrieved 2015-10-02.
  10. ^ Hoffman, Liz (2015-11-18). "Towers Watson, Willis Merger in Doubt as Investors Balk". The Wall Street Journal. News Corp. Retrieved 2015-12-01.
  11. ^ Flaherty, Michael; Subba, Nikhil (December 11, 2015). Baum, Bernadette; Dasgupta, Shounak, eds. "Towers Watson, Willis merger gets shareholder nod". Reuters. Thomson Reuters. Retrieved 2015-12-17.
  12. ^ "Willis Towers Watson - Merger Fact Sheet" (PDF). Willis Towers Watson. Retrieved 2015-09-07.
  13. ^ Comtois, James (2015-07-13). "Towers Watson, Willis merger to combine strengths". Pensions & Investments. Crain Communications, Inc. Retrieved 2015-09-07.
  14. ^ Bray, Chad (2015-06-30). "Willis Group and Towers Watson to Merge". The New York Times. The New York Times Company. Retrieved 2015-09-07.
  15. ^ Jones, Sarah; Basak, Sonali (2015-06-30). "Willis to Merge With Towers Watson in $8.7 Billion Deal". Bloomberg Business. Bloomberg L.P. Retrieved 2015-09-07.
  16. ^ "Willis Towers Watson boosts revenue, net income; merger costs 'material'". Business Insurance. 2016-05-06. Retrieved 2016-05-06.
  17. ^ Ralph, Oliver (25 June 2018). "Willis Towers Watson chief prepared to do more deals". Financial Times. Retrieved 25 June 2018.

External links[edit]