Gallagher buys reinsurance, brokerage businesses from Willis Towers Watson

18 May 2021 Consulting.us 2 min. read

Arthur J. Gallagher & Co. (Gallagher) has agreed to acquire select reinsurance, specialty, and retail brokerage operations from Willis Towers Watson (WTW).

The $3.57 billion transaction arrives after EU antitrust regulators brought up competition concerns in Aon’s $30-billion deal to acquire WTW, a rival HR and risk consulting and insurance broking firm.

The divestment deal with Gallagher hopes to satisfy the EU Commission competition panel, which will make its decision on the Aon-WTW merger in August. The divestment also aims to satisfy regulatory reviews in other jurisdictions, including the United States.

Announced in March, the Aon-WTW merger – with all businesses intact – would create a firm with nearly 100,000 employees in 140+ countries and annual revenue of $20 billion. The sale of select WTW assets to Gallagher will lop off 6,000 employees and $1.3 billion in annual estimated pro forma revenue.

Gallagher buys reinsurance, brokerage businesses from Willis Towers Watson

The acquired operations include WTW’s global reinsurance brokerage, which generated approximately $750 million in revenue in 2020, and represents over 750 insurance and reinsurance company clients in 25+ countries.

Also part of the deal are corporate risk and brokerage operations in the UK and Western Europe, representing $500 million in annual revenue, as well as US corporate risk and broking services for property & casualty in the US, representing approximately $50 million in annual revenue.

Gallagher will also buy WTW’s health & benefits business units in France, Spain, and Germany.

"This acquisition will accelerate our long-term strategy by significantly expanding our global value proposition in reinsurance, broadening our retail brokerage footprint, and strengthening key niches and specialty brokerage offerings," said J. Patrick Gallagher, Jr., chairman, president, and CEO of Gallagher.

The transaction is contingent on the Aon-WTW merger clearing, as well as the completion of other customary closing conditions.

Gallagher is based in Rolling Meadow, IL and has more than 34,000 employees in 56 countries. The firm offers insurance brokerage, risk management, and consulting services to clients across industries.