TOWERS Watson's reinsurance brokerage business is one of the most respected in the market, generating revenues of USD 166 million and profit before tax of USD 26million in the year ended June 2013, making it the 4th largest reinsurance broker in the world.
This acquisition significantly accelerates JLT's existing strategy to increase its international reinsurance brokerage operations. It combines TOWERS Watson's well-established North American and London Market reinsurance businesses with JLT Re's international reinsurance operations, dynamic brand and strong London Market operation. The combined business will benefit from considerably enhanced scale, capability and market presence.
"TOWERS Watson offers us a very strong reinsurance platform in the key North American market, as well as bringing further strength in the London Market and a leading analytical capability. We see a significant strategic opportunity through the merger of the two businesses to create a formidable new force and restore client choice to the reinsurance market. We are committed to investing in the business to enhance our client proposition and drive growth, as we have successfully done across the rest of the JLT Group in recent years", Dominic BURKE, Group Chief Executive of JLT, declared.
The acquisition is subject to regulatory approvals and is expected to complete before the year end. The two businesses will be fully integrated over the course of 2014 and 2015.
Total transaction and integration costs are expected to be approximately USD 7 million and USD 20 million respectively. The acquisition will be made on a debt and cash free basis and financed from JLT's cash resources and debt and is expected to be earnings accretive in the first full year following completion. The gross assets being acquired amount to approximately USD 106 million.
Commenting on the transaction, Alastair SPEARE-COLE, CEO, JLT Re, said: "We have long admired TOWERS Watson as one of the best reinsurance brokers in the world. TOWERS Watson is known in the industry as a fierce advocate for its clients with deep specialist and analytical expertise."
"JLT offers our clients and our people a great opportunity to work with a company that shares our values and focus on clients. Together we will have the platform, market presence and support of a strong organisation to attract and retain the very best people in the market and improve our client offering", Ross HOWARD, Head of TOWERS Watson's reinsurance brokerage business, added.