Arthur J. Gallagher & Co. announced it has completed the $3.25 billion acquisition of nearly all of the treaty reinsurance brokerage operations of Willis Towers Watson plc.
Together with Gallagher’s existing reinsurance operations, the combined businesses will trade as Gallagher Re from more than 70 offices across 31 countries and incorporate approximately 2400 colleagues.
Gallagher’s plan to purchase Willis Re, first announced on May 12, 2021, was delayed after the plug was pulled in July on the $30 billion merger of Aon and Willis Towers Watson, a deal that was opposed by the U.S. Department of Justice. Willis had agreed to sell the reinsurance unit to satisfy antitrust concerns of European regulators an Aon-Willis merger.
In a filing with the U.S. Securities and Exchange Commission, WTW said it will receive a total upfront cash consideration of $3.25 billion plus an earnout payable in 2025 of up to $750 million in cash, subject to certain adjustments including for net debt, net working capital and net fiduciary assets.
Further, the filing said, the closing of the sale in the Dubai International Finance Centre, China, Hong Kong, Indonesia, Japan, Singapore, Taiwan, South Korea, Argentina, Mexico, Netherlands and Spain has not yet occurred and is anticipated to be completed during the first quarter of 2022 (or, in the case of China, during the second quarter of 2022).
“This acquisition brings specialist expertise, underpinned by a portfolio of analytics capabilities including catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling that will immediately provide exceptional value to insurance carriers and insurance capital providers around the world,” said Gallagher in a statement.
Gallagher Re will be led by James Kent, global reinsurance CEO, who will report to Tom Gallagher, Gallagher’s CEO of Global Property & Casualty Brokerage.
“I’d like to officially welcome our new reinsurance brokerage colleagues to the Gallagher family of professionals,” said J. Patrick Gallagher Jr., chairman, president and CEO. “Together, we will build upon our shared focus of outstanding service, expertise and client-centric culture. I am confident the combination will deliver tremendous value to our clients, our global brokerage and risk management teams, and our shareholders.”
“This combination marks a new chapter for two remarkable reinsurance broking teams as well as for our valued and extremely supportive clients and stakeholders,” said Kent. “We are bringing together highly complementary and well-respected reinsurance businesses to create a truly compelling unified reinsurance platform. I am incredibly proud to be leading Gallagher Re into its next phase of growth.”
*This story ran prevoiusly in our sister publication Insurance Journal.