Shareholders approve merger of Willis Group, Towers Watson

Shareholders of commercial insurance brokerage Willis Group Holdings plc and consulting firm Towers Watson & Co. have approved a US$18-billion merger agreement, the firms announced Friday.

“The companies expect that the transaction will close very early in the New Year, subject to customary closing conditions, including the receipt of certain regulatory approvals,” Willis and Towers Watson said in a press release.

London-based Willis ranked third, by commercial non-life broking revenues in 2013, on Finaccord Ltd.’s list of the world’s top commercial insurance brokers.

Towers Watson was formed in 2010 with the merger of Towers, Perrin, Forster & Crosby Inc. and Watson Wyatt Worldwide Inc. Towers Watson’s services include actuarial valuation and due diligence support for insurance industry mergers and acquisitions. It also provides product development, predictive modeling, claims consulting and catastrophe modeling for the insurance industry.

Once the merger with Willis is completed, the combined firm will be called Willis Towers Watson. Like Willis Group, the combined firm will be “domiciled” in Ireland, but it is not clear where the combined firm’s principal offices will be.

Willis Group’s jurisdiction of incorporation or organization is Ireland, but its principal executive office is in London. Towers Watson – incorporated in the U.S. state of Delaware – has its principal executive office in Arlington, Va. about 10 kilometres west of the White House.

The chief executive officer of the merged firm will be John Haley, currently chairman and CEO of Towers Watson. The deputy CEO and president will be Dominic Casserley, currently Willis Group’s CEO.

James McCann will be chairman of Willis Towers Watson. McCann is currently Willis’s non-executive chairman and has been chairman and CEO, since 1976, of florist and gift shop firm 1-800-Flowers.Com Inc.

Haley joined Watson Wyatt in 1977 and was appointed president and CEO in 1999.

Related: Towers Watson issues letter to stockholders urging support for Willis merger

Casserley worked for 29 years at McKinsey & Company before his appointment at Willis CEO in January, 2013.

At its shareholders meeting Dec. 11, Towers Watson shareholders voted in favour of the merger with Willis. At Willis’s meeting, “shareholders approved a proposal that Willis issue new shares to Towers Watson shareholders as required to complete the merger,” the firms stated in a release. “Shareholders also approved proposals to change the name of the combined company to Willis Towers Watson upon completion of the merger and to execute a reverse stock split in which every 2.6490 Willis shares would be converted to one share, allowing Towers Watson shareholders to receive one post-split Willis share for each Towers Watson share.”

Willis shareholders are expected to own about 50.1% and Towers Watson shareholders are expected to own about 49.9% of the combined company, Towers Watson indicated in an earlier filing with the United States Securities and Exchange Commission.

Willis Group reported US$3.8 billion in revenue in 2014 and $841 million in the three months ending Sept. 30, 2015.

Related: Meetings on proposed merger between Willis and Towers Watson adjourned until Friday

In North America, Willis Group’s largest industry practice is in construction, in which it provides risk management services and places insurance and surety bonds. In Canada, Willis also provides cyber, directors’ and officers’ liability, professional liability and environmental, among others. Toronto-based Willis Canada’s CEO is Brian Parsons. Willis also has offices in Calgary, Vancouver and Montreal. Willis Canada also operates Willis Corroon Aerospace of Canada Ltd. in Montreal and Vancouver. Three years ago, Willis Canada acquired Avalon Actuarial Inc., which provides employee benefits consulting, group insurance, retirement and pension plans.

Willis Group’s global business is divided into Willis Re, Facultative, UK Insurance, Willis Capital Markets & Advisory and Risk & Analytics.

Towers Watson reported revenue of $3.64 billion in the year ending June 30, 2015 and $895.6 million in the three months ending Sept. 30.

In Canada, Towers Watson is led by managing director (and managing consultant for the Montreal office) Michel Tougas.