Business

Gallagher to acquire WTW reinsurance brokerage operations

Under the agreement, Gallagher will acquire the combined operations for an initial gross consideration of $3.25bn (£2.34bn)

Arthur J. Gallagher and Co has reached an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson, in a deal that is expected to close during the fourth quarter of 2021.

Under the agreement, Gallagher will acquire the combined operations for an initial gross consideration of $3.25bn (£2.34bn), and potential additional consideration of $750m (£541m) subject to certain third-year revenue targets.

Benefits of the acquisition are expected to include:

  • Expanded global value proposition within reinsurance brokerage
  • A broad suite of analytics capabilities including actuarial services, catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
  • Addition of talented management team
  • Increased product breadth & offerings
  • Further leveraging of Gallagher’s industry-leading alternative risk and ILS business
  • Strengthened relationships with major insurance carriers

For the year ended December 31, 2020, the reinsurance operations generated $745m (£537m) of estimated pro forma revenue and $265m (£191m) of estimated pro forma EBITDA. 

Integration is expected to take approximately three years with total non-recurring integration costs estimated to be approximately $250m (£180m). 

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.”

Show More
Back to top button