Arthur J. Gallagher has acquired the treaty reinsurance brokerage operations of Willis Towers Watson (WTW).
The deal sees Gallagher acquire the combined operations for an initial $3.25bn with the potential of a further $750m subject to certain third-year revenue targets.
Willis Re’s treaty reinsurance business operates in 24 countries, places over $10bn of premium annually and represents more than 750 insurance and reinsurance company clients.
The integration of the business is expected to take around three years with total non-recurring integration costs estimated to be approximately $250m.
The transaction is expected to close during Q4 2021.
Commenting on the deal, J. Patrick Gallagher, Jr., chairman, president and CEO, said: “Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher and this acquisition will significantly enhance our global value proposition.
“We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects.
“I look forward to welcoming the 2,200 new colleagues joining us as part of this transaction to our growing Gallagher family of professionals.”
The deal comes hot on the heels of yesterday’s announcement from Gallagher in which it revealed it has purchased a majority stake in Turkish specialty broker Brokers’ House (BH Sigorta ve Reasürans Brokerligi). Terms of the transaction were not disclosed.
It also follows last month’s collapse of the proposed $30bn merger of Aon and WTW due to US regulatory concerns. That could end up costing Aon around $1.4bn.