Towers Watson and Willis Shareholders Approve $8.9 Billion Merger Deal

By | December 11, 2015

Towers Watson & Co. won approval from its shareholders for an $8.9 billion merger with insurance broker Willis Group Holdings Plc, overcoming opposition from proxy advisers.

Willis shareholders also supported the combination, according to a joint statement from the companies that didn’t disclose vote tallies.

“We are confident that combining Towers Watson and Willis will accelerate both companies’ long-term strategies and create substantial incremental value for shareholders,” Towers Watson Chief Executive Officer John Haley said in the statement.

Willis agreed in June to merge with Towers Watson to better compete with brokers including Marsh & McLennan Cos. and Aon Plc, which also have substantial consulting operations. The initial deal valued Towers Watson at about $8.7 billion, terms derided by investor Driehaus Capital Management LLC as a “takeunder.”

Willis agreed last month to more than double the one-time cash dividend to $10 a share, after Towers Watson postponed a shareholder vote. The new offer valued the consulting company at about $8.9 billion based on Willis’s stock price at the time.

Tax Benefit

That failed to convince proxy adviser Glass Lewis & Co., which said that the increased dividend was an “insufficient improvement” and urged Towers Watson investors to vote against the deal. Towers Watson and Willis had said a merger would increase shareholder value by about $4.7 billion because of cost savings, opportunities for increased revenue and tax benefits. London-based Willis enjoys lower rates than U.S. companies.

Under terms of the agreement, Haley will lead the combined company, and Willis’s stockholders will hold about 50.1 percent. The consulting company’s investors will receive 2.649 Willis shares for each Towers Watson share they own, plus the cash dividend.

Towers Watson stock closed at $127.34 Thursday in New York. That compares with $137.98 the day before the June deal was announced.

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