Towers Watson and Willis amend merger terms
Towers Watson and Willis have amended the terms of their merger agreement, sweetening the deal for Towers Watson shareholders.
Under the amended terms, Towers Watson shareholders will receive a one-time cash dividend of $10 per Towers Watson share pre-closing, an increase of $5.13 per Towers Watson share over the original terms of the agreement.
The revised transaction terms have been unanimously approved by each company’s board of directors.
There will be no change to the number of Willis shares that Towers Watson shareholders will receive for each Towers Watson share, to the terms of the proposed reverse stock split, or to the management and governance arrangements originally announced.
Pending the approval of the new board, in the 6-12 months following the close of the deal, Willis will initiate a plan to return capital to shareholders to achieve a leverage ratio for the new company broadly in-line with Willis' investment grade rating profile.
“We believe that the combination of Willis and Towers Watson will create significant value for our shareholders, and that together we can achieve significantly more at a faster pace than we can independently,” said Dominic Casserley, chief executive officer of Willis.
“In order to enable Towers Watson shareholder support, we are therefore agreeing to allow Towers Watson to increase the pre-close cash dividend. This is not a decision that we take lightly.
“However, for an increment of $179 million (50.1 percent of $357.4 million), Willis shareholders have the opportunity to receive 50.1 percent of an estimated $4.7 billion of additional value that the deal is expected to generate.”
The one-time cash dividend will be funded by Towers Watson pre-closing, and any debt incurred to fund the dividend will continue as an obligation of Towers Watson as a subsidiary of the combined firm, Willis Towers Watson.
ValueAct Capital, the owner of approximately 10.3 percent of the common stock of Willis and 0.68 percent of the common stock of Towers Watson, remains fully committed to backing the deal with its amended terms, according to Willis.
