Towers Perrin, Watson Wyatt to merge in $3.5 bn deal

Towers Perrin, Watson Wyatt to merge in $3.5 bn deal
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First Published: Mon, Jun 29 2009. 05 37 PM IST
Updated: Mon, Jun 29 2009. 05 37 PM IST
New York: Global consultancy firms Towers Perrin Forster & Crosby and Watson Wyatt Worldwide will be merging with each other in a deal valued at $3.5 billion.
Both entities, which advices companies on people and financial management, among others, have a good presence in India.
The merged entity to be known as Towers Watson would have annual revenues of more than $3 billion, both companies said in a statement on Sunday.
The proposed deal would help both companies to diversify their businesses, expand their geographical presence and also boost growth.
The board of directors of the two firms have approved a definitive agreement for the proposed merger.
“Based on the closing price of Watson Wyatt common stock on 26 June, 2009, the implied equity value of the transaction is approximately $3.5 billion,” the statement said.
John Haley, who is the chief executive of Watson Wyatt, would hold the same post at Towers Watson, while Towers Perrin’s chief executive Mark Mactas would serve as the president of the merged entity.
According to the statement, Towers Watson would focus its operations on three segments — benefits, talent and rewards, and risk and financial services.
Watson Wyatt shareholders would receive 50% of the combined firm’s shares, while the remaining 50% would be held by Towers Perrin’s shareholders.
”Towers Watson, which is expected to have annual revenues in excess of $3 billion, will benefit from the scale of the combined companies and anticipates approximately $80 million in pretax annual synergies.
The statement noted that even though significant savings are expected in the first two years after the deal is completed, the full realisation of synergies would take three years and cost approximately $80 million.
“The combination (of Towers Perrin and Watson Wyatt) will further strengthen our core service lines while offering our clients an enhanced portfolio of proven offerings across a range of financial, risk and people management areas,” Watson Wyatt chief executive John Haley said.
Going by its website, Watson Wyatt has consulting offices in the Indian cities of New Delhi, Bangalore, Mumbai and Kolkata.
Commenting on the deal, Towers Perrin’s chief executive Mark Mactas said the transaction positions the company well for a future of accelerated growth and higher levels of profitability.
“Our service lines and geographic strengths are also highly complementary, which creates great opportunities for growth,” Mactas said.
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First Published: Mon, Jun 29 2009. 05 37 PM IST