Arthur J. Gallagher & Co. (NYSE:AJG) completed the acquisition of Willis Re from Willis Towers Watson Public Limited Company (NasdaqGS:WLTW).
Arthur J. Gallagher & Co. (NYSE:AJG) signed an agreement to acquire Willis Re from Willis Towers Watson Public Limited Company (NasdaqGS:WLTW) for $4 billion on August 12, 2021. The business will be divested for 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. Gallagher intends to finance the transaction using cash on hand, including the $1.4 billion of net cash raised via its May 17, 2021 follow-on common stock offering and the $850 million of net cash borrowed via its May 20, 2021 30-year senior note issuance, short-term borrowings and additional free cash generated before close. Completion of the deal is subject to the receipt of required regulatory approvals and clearances, as well as other customary closing conditions and consultation where required, receipt of certain governmental approvals under competition, foreign investment and financial services laws (ii) expiration or termination of the applicable HSR waiting period, (iii) the absence of governmental restraints or prohibitions preventing the consummation of the Transaction and (iv) certain other customary closing conditions. As of October 5, 2021, The Competition and Markets Authority (CMA) is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services. To assist it with this assessment, the CMA invites comments on the transaction from any interested party, closes on October 19, 2021. The CMA announced the launch of its merger inquiry by notice to the Parties on October 4, 2021 and has a deadline of November 29, 2021 for its phase 1 decision.
The transaction is expected to close during the fourth quarter of 2021. The acquired operations would be about 5% accretive to its 2020 adjusted GAAP EPS excluding earnings from clean energy investments and 9% accretive to Gallagher's 2020 adjusted GAAP EPS excluding amortization and earnings from clean energy investments. Morgan Stanley & Co. LLC acted as a financial advisor to Gallagher on the transaction. Carlos Bonhome, Miguel Ángel Castaño of Cuatrecasas, Gonçalves Pereira, S.L.P. acted as legal advisor for Arthur J. Gallagher. Brian J. Fahrney, Brent M. Steele and Ian Helmuth of Sidley Austin LLP acted as a legal advisor to Arthur J. Gallagher & Co. Joseph A. Coco, Kyle Hatton, Alex Jupp, Jessica Hough, Heather Cruz, Todd E. Freed, Helena Derbyshire, Andrew Woodard and Sonia K. Nijjar of Skadden, Arps, Slate, Meagher & Flom LLP acted as a legal advisor to Willis Towers Watson Public Limited Company. As of November 22, 2021 CMA has cleared the anticipated acquisition by Arthur J. Gallagher & Co. of the Treaty Reinsurance business of Willis Towers Watson.
Arthur J. Gallagher & Co. (NYSE:AJG) completed the acquisition of Willis Re from Willis Towers Watson Public Limited Company (NasdaqGS:WLTW) on December 1, 2021.