Urges Stockholders to Vote “FOR” the Merger with Willis
Strategic Combination Accelerates Towers Watson’s Long-Term Growth
Strategy and is Expected to Create Approximately
Included below is the full text of the letter to
Dear Fellow Stockholder,
WE URGE YOU TO VOTE “FOR” THE MERGER EXPECTED TO CREATE
The Towers Watson Board believes the Willis/
The Towers Watson Board has carefully evaluated and analyzed this strategic transaction, which brings together two highly complementary advisory, broking and solutions businesses to deliver tangible stockholder value. The merger with Willis builds on our track record of successfully integrating transactions, over-delivering on synergies and creating stockholder value, as demonstrated by the MOE between Towers Perrin and Watson Wyatt.
This transaction is consistent with our long-term growth strategy,
creating a powerful global platform that will allow us to offer clients
more comprehensive advice, analytics, specialty capabilities and
solutions worldwide. As a global leader with enhanced scale advantages,
we will be positioned to compete successfully, significantly accelerate
our growth trajectory and deliver approximately
- Substantial revenue and earnings growth through expanded client reach and increased market penetration;
- Clearly identified, highly achievable cost synergies in addition to cost savings already announced as part of Willis’ Operational Improvement Program; and
A more efficient tax profile for
Towers Watson, including an expected effective tax rate in the mid-20% range – compared to the current tax rate in the mid-30% range – saving approximately $75 millionannually within two years.
Due to the nature of both the
Since announcing the merger on
Accelerates Towers Watson’s Long-Term Growth Strategy
The merger with Willis accelerates our long-term strategic plan and
positions the combined company to deliver an estimated
Expands Client Reach.
Towers Watsonwill gain access to Willis’ leading global distribution network across more than 120 countries. In addition, this combination brings together Towers Watson’s deep penetration across large market clients – including relationships with over 800 Fortune 1000 companies – with Willis’ strong U.S. middle-market relationships.
The transaction will enable
Towers Watsonto enhance our growth across three key areas:
- OneExchange. Willis’ middle-market relationships expand direct access to the addressable health benefits exchange market, supporting Towers Watson’s goal of capturing a 25% share of the growing active employee exchange market.
- Large Market Property and Casualty (“P&C”) Brokerage. Towers Watson’s relationships with 80% of the companies in the large corporate market will facilitate the expansion of Willis’ market share within the $10+ billion U.S. large corporate P&C market.
- Global Health and Group Benefits. Willis’ network provides opportunities to increase the global reach of Towers Watson’s health benefits offerings which are enabled by the Liazon platform.
- Provides Strong Platform for Innovation. Beyond providing a platform to further distribute existing products, the merger creates a strong platform for future innovation, new product development and growth.
Clearly Identified and Highly Achievable Cost Synergies and Irish Domicile Tax Benefits
We expect this merger to materially increase Adjusted EBITDA and
earnings growth through the realization of
Significantly Accretive to Adjusted EBITDA and Cash Net Income
The Board and management, with the support of independent advisors,
reviewed these revenue opportunities, cost synergies and tax savings in
conjunction with each company’s standalone forecasts for calendar years
2016-2018 and determined that the combined
TOWERS WATSON HAS A PROVEN TRACK RECORD OF M&A SUCCESS
Consistent with the MOE structure, the proven Board and management of
Given the ongoing leadership role of the
RIGHT DEAL, RIGHT PARTNER, RIGHT TIME
The Towers Watson Board and management, with the support of independent
advisors, have carefully evaluated and analyzed this transaction. This
is the right deal, with the right partner, at the right time for
A MOE is a Compelling Transaction Structure.
A MOE provides the unique ability to leverage and enhance the
strengths of both companies. As we combine
Towers Watsonand Willis, a MOE enables us to retain our most important assets – our people and our clients – mitigating a key risk of prior business combinations within the industry.
To be clear, this is NOT a sale transaction where the value proposition to stockholders is in the form of a premium at closing. As is characteristic of a MOE, neither company is being sold to the other. Through this merger, similar to the Towers Perrin/Watson Wyatt transaction,
Towers Watsonstockholders will benefit from their 49.9% ownership in a combined entity that is expected to deliver approximately $4.7 billionin incremental stockholder value.
Ideal Partner. Willis brings a truly
complementary set of capabilities to
Towers Watson. We pursued this transaction because of the significant upside potential the two companies can generate together. It is a natural extension of our current strategy that better positions Towers Watsonto succeed.
Simply put, while we were confident in our plan as a standalone company, given the value we can create together, we believe the unique opportunity to partner with Willis is even more compelling.
Towers Watsonand Willis’ trajectories have progressed in tandem over the last several years. Towers Watsonhas expanded into products and solutions – traditionally Willis’ strengths. Willis has sought to provide more analytic capabilities – an area in which Towers Watsonexcels.
Today, as our respective businesses and the industries we serve have evolved, we have a tremendous opportunity to create even more value together. By building on the best of both companies, we can provide the optimal mix of client offerings with a comprehensive portfolio of advisory services, solutions and technology.
In addition, the share exchange ratio for the MOE, which was calculated based on the relative stock prices of
Towers Watsonand Willis over a sixty day period and adjusted for the special dividend to Towers Watsonstockholders, was more favorable to Towers Watsonthan if computed on any other sixty day period prior to June 5, 2015, the day it was calculated.
The Board is focused on pursuing the course of action that will best drive stockholder value and believes that the Willis merger represents a unique opportunity to do so. We are confident this transaction is the best way to maximize value for our stockholders today and in the long term.
VOTE “FOR” THE CREATION OF WILLIS TOWERS WATSON
Your vote is very important. To ensure your representation at the
PLEASE VOTE THE ENCLOSED PROXY CARD TODAY!
Please vote promptly whether or not you expect to attend the
On behalf of the Towers Watson Board and management team, thank you for your continued support.
|John J. Haley||Linda D. Rabbitt|
|Chairman and Chief Executive Officer||Lead Independent Director|
|Towers Watson & Co.||Towers Watson & Co.|
Where You Can Find Additional Information
In connection with the proposed merger of
This document contains “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995. You can
identify these statements and other forward-looking statements in this
document by words such as “may”, “will”, “would”, “expect”,
“anticipate”, “believe”, “estimate”, “plan”, “intend”, “continue”, or
similar words, expressions or the negative of such terms or other
comparable terminology. These statements include, but are not limited
to, the benefits of the business combination transaction involving
The following factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements: the
ability to obtain governmental approvals of the transaction on the
proposed terms and schedule; the failure of
You should not rely upon forward-looking statements as predictions of
future events because these statements are based on assumptions that may
not come true and are speculative by their nature. Neither
1 Time period covering
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