OREANDA-NEWS. Willis Group Holdings (NYSE:WSH) today urged its shareholders, and those of Towers Watson (NASDAQ:TW), to vote “FOR” the proposed merger of equals between the two firms.

For Willis shareholders, the proposed deal further strengthens the powerful standalone Willis value proposition. The proposed deal enables Willis shareholders to participate in the significant economic opportunity ($4.7 billion of estimated incremental value) generated by the planned combination.

For Towers Watson investors, the deal accelerates the firm’s publicly stated long-term strategy. It delivers value to Towers Watson shareholders through clear, compelling synergies and new client opportunities. For Towers Watson shareholders, as Towers Watson has stated, the combination is expected to result in projected cash net income accretion of an estimated 45% by calendar year 20181.

This transaction was unanimously agreed upon by both boards of directors. Willis will contribute 55.8% of the projected combined EBITDA2 in 2016 excluding synergies, is enabling a significant portion of the merger synergies through its Irish domicile, and its CEO and CFO will not hold those roles in the new company. On the day before announcement, Towers Watson contributed 53.6% of the combined market capitalization3. Taking both these positions into consideration, the final terms were negotiated such that the overall economics (including the dividend to Towers Watson shareholders) were split virtually down the middle: 50.9% Towers Watson, 49.1% Willis. This resulted in a modest premium to Willis’ unaffected share price, well within the range of “merger of equals” transactions.

Willis continues to believe strongly that the combined Willis Towers Watson will generate significantly higher shareholder returns than either company could have generated on their own. We urge both sets of shareholders to vote for the deal. We would also like to refute ISS’ claim that, “Willis may have more riding on the approval of this transaction than Towers”. As we displayed this past quarter, we expect to continue to achieve strong growth coupled with significant margin improvement as a result of our operational improvement program. We remain highly confident in our standalone plan and believe we are positioned for several years of strong earnings growth. 

Both Willis and Towers Watson investors will benefit from the significant incremental value the two companies expect to create together. As previously disclosed, the merger can create more than $375 million in incremental annual revenue in the healthcare exchange, large market property & casualty insurance broking, and global benefits consulting business. The companies also project approximately $100 million - $125 million in annual cost savings and $75 million in annual tax savings.

Dominic Casserley, Willis Group Chief Executive Officer, said: “This transaction is expected to generate significant value through very achievable cost savings, incremental revenues and tax benefits. Shareholders should support this deal as it will drive value creation and accretion to earnings. Willis remains committed to closing the transaction on the agreed terms.”

James McCann, Chairman of Willis Group, said: “At the negotiated terms, this is a ground-breaking, strategic transaction that enhances the competitive position and value creation potential of both companies. We call on shareholders of both firms to support the agreed deal.”

Willis will hold an extraordinary general meeting of its stockholders to vote on the proposed merger with Towers Watson at 9:30 a.m. on November 18, 2015 at the Pierre Hotel, 2 East 61st Street, New York, NY 10065. Willis stockholders of record as of the close of business on October 2, 2015 will be entitled to vote at the meeting. Towers Watson will hold a special meeting of its stockholders to vote on the proposed merger with Willis at 8:00 a.m. local time on November 18, 2015 at the Royal Palm South Beach, 1545 Collins Avenue, Miami Beach, FL 33139. Towers Watson stockholders of record as of the close of business on October 1, 2015 will be entitled to vote at the Towers Watson special meeting.