Willis Towers Watson (WTW) has agreed to sell Willis Re to Arthur J. Gallagher & Co. in a deal valued at $3.25 billion and includes an earnout payable in 2025 of up to $750 million in cash, WTW reported.
The transaction is expected to close no later than the end of the first quarter of 2022, according to WTW.
This news comes on the heels of the dissolution of Gallagher’s initial deal to buy Willis Re, which was contingent on the completion of the Aon/WTW merger.
“Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher, and this acquisition will significantly enhance our global value proposition,” J. Patrick Gallagher, Jr., Gallagher chairman, president and CEO, said in a release. “We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects.”
Gallagher reported the deal will expand its global value proposition within reinsurance, enhance its analytics capabilities, bring additional talent to the management team, increase its product breadth and offerings and strengthen its relationships with major insurance carriers.
In a release, WTW CEO John Haley said: “Following the termination of the proposed combination with Aon, we have been taking time to reflect on what we have learned about WTW over the last 16 months and determine how we will move forward as an independent company. As part of this, we conducted a review of strategic alternatives for Willis Re, our global reinsurance business. While we highly value Willis Re and our colleagues who contribute to its success, we concluded that divestment was the appropriate path for this business and for WTW.”