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Arthur J. Gallagher to Acquire Certain Willis Towers Watson Operations for USD 3.57bn
Friday 14 May 2021

Chicago-based insurance brokerage Arthur J. Gallagher and Co. (NYSE: AJG) has agreed to acquire certain Willis Towers Watson plc reinsurance, speciality and retail brokerage operations for USD 3.57bn, the company said.

Gallagher will acquire the combined operations as part of a proposed regulatory remedy for the pending Aon plc and Willis Towers Watson plc combination. The transaction is expected to close during the second half of 2021.

Gallagher expects to finance the transaction using a combination of long-term debt, short-term borrowings, free cash and common equity. The final funding contemplates Gallagher maintaining its investment grade debt rating.

Integration is expected to take approximately 3 years with total non-recurring integration costs estimated to be approximately USD 350m.

The transaction is subject to European Commission, US Department of Justice and other regulatory approvals, including regulatory approvals related to the pending Aon plc and Willis Towers Watson plc combination and the proposed remedy.

This acquisition will accelerate Gallagher's long-term strategy by expanding the company's global value proposition in reinsurance, broadening our retail brokerage footprint and strengthening key niches and speciality brokerage offerings.

The UK and European brokerage operations generated approximately USD 500m of estimated pro forma revenue for the year ended December 31, 2020.

European retail brokerage includes certain operations in Germany, Netherlands, Spain and France, including the vast majority of French insurance broker, Gras Savoye. Speciality operations in the U.K principally include cyber, space and aerospace products.

The North American brokerage operations generated approximately USD 50m of estimated pro forma revenue for the year ended December 31, 2020.

This includes certain property/casualty brokerage business from predominantly middle-market and large-account clients located in select markets such as San Francisco, Houston and Bermuda, across niches such as construction and energy.

Morgan Stanley and Co. LLC and BofA Securities acted as financial advisors and Sidley Austin LLP acted as legal advisor to Gallagher on this transaction.

Arthur J. Gallagher and Co. (NYSE: AJG) is a global insurance brokerage, risk management and consulting services firm with operations in 56 countries.
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Date Published: 14/05/2021

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