The European Commission on Friday, December 4, granted clearance for Towers Perrin and Watson Wyatt Worldwide to merge, paving the way for the benefits consulting firms to complete their union by year’s end.
U.S. antitrust authorities have already cleared the transaction, which will create the world’s largest employee benefits consulting firm, with annual revenue of about $3 billion.
The merger will bring together Arlington, Virginia-based Watson Wyatt and Stamford, Connecticut-based Towers Perrin, which each reported about $1.7 billion in revenue in 2008. The combined company is to be called Towers Watson & Co. Watson Wyatt has about 7,500 employees and operates in 33 countries, while Towers Perrin has more than 6,300 employees and operates in 26 countries.
The two firms are especially well-known for their expertise in retirement plan and health care consulting. Additionally, Towers Perrin offers risk management and reinsurance brokerage services.
“The sum will be greater than its parts. Strategically, it will be a great fit,” Watson Wyatt CEO John Haley said in a conference call shortly after the merger was announced in June. Haley will serve as CEO of the merged company.
As part of the European Commission’s decision, Watson Wyatt agreed to sell its life insurance actuarial software business, known as VIPitech, but the merged company can retain a license to use the software.
Towers Perrin, which is privately held, and publicly held Watson Wyatt have scheduled shareholder meetings for December 18 to approve the merger, which they expect to be effective on January 1, 2010.