Willis Towers Watson is selling its global reinsurance business, Willis Re, to Arthur J. Gallagher & Co. for US$3.25 billion.
The transaction is set to close by the end of the first quarter of 2022 and there’ll be an earnout payable in 2025 of up to US$750 million in cash, subject to certain adjustments.
The sale comes on the heels of Aon and Willis Towers calling off its proposed merger and ending litigation with the U.S. Department of Justice in July. The merger, which was first announced in March 2020 and received shareholder approval in August 2020, was challenged in June, with the DOJ asserting the deal could eliminate competition, raise prices and hamper innovation for U.S. businesses, employers and unions that use the two consultancies’ services.
“Following the termination of the proposed combination with Aon, we’ve been taking time to reflect on what we have learned about WTW over the last 16 months and determine how we’ll move forward as an independent company,” said John Haley, chief executive officer of Willis Towers Watson, in a press release on Friday. “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.”
And Willis Towers Watson announced Monday that Carl Hess will be the company’s new president and next CEO. Hess, who currently serves as its head of investment, risk and reinsurance business segment, is immediately taking on the president role and will succeed Haley, upon his retirement, as CEO on Jan. 1, 2022.