Arthur J. Gallagher & Co. announced Friday that it has agreed to buy Willis Towers Watson PLC’s treaty reinsurance business for a purchase price that could rise to $4 billion.
The announcement comes less than a month after a deal for Gallagher to buy a larger slice of Willis’ business for $3.57 billion fell apart after the transaction it was contingent on – Aon PLC’s much bigger proposed acquisition of Willis – was terminated in the face of regulatory opposition.
Under the terms of the latest deal, which is expected to close in the fourth quarter, Gallagher will make an initial payment of $3.25 billion and potentially pay another $750 million subject to third-year revenue targets, a Gallagher statement said. Gallagher will take on about 2,200 Willis reinsurance staff.
The operations Gallagher is buying generated $745 million in pro forma 2020 revenue and $265 million in earnings. The figures include