Moody’s places Willis on negative watch

Rating agency Moody’s has placed Willis on negative watch, following the broker’s announcement of a firm offer to acquire French insurance broker Gras Savoye.

Willis offered €550 million to acquire the remaining 70 percent of the broker.

Moody’s said that although the proposed acquisition would expand Willis's global network, it could potentially put a strain on Willis' cash and management resources related to this and other, smaller acquisitions, and also related to a multi-year restructuring programme the company commenced last year.

"The proposed acquisition builds on a long working relationship between Willis and Gras Savoye, and strengthens the group's international network," said Bruce Ballentine, Moody's lead analyst for Willis.

"The negative rating outlook reflects Willis's relatively high financial leverage as well as challenges associated with acquisitions and the ramp-up of its four-year restructuring programme. Any potential debt financing to help fund acquisitions, combined with costs of the restructuring, could further increase the financial leverage."