Arthur J. Gallagher & Co. completed on Wednesday its acquisition of Willis Re with a payment of $ 3.25 billion that could rise to $ 4 billion depending on future revenues.
The deal follows a turbulent period of seven months that saw Gallagher's original offer to buy Willis Re in May collapses and is later modified and revived after Aon PLC's deal to buy Willis Towers' Watson PLC ended in July due to regulatory opposition.
The acquisition of Willis Re creates a $ 1 billion annual reinsurance broker revenue and makes Gallagher Re the world's third largest reinsurance broker.
The deal will also improve Gallagher's insurance brokerage business, says J. Patrick Gallagher Jr., President, President and CEO of Gallagher.
Under the terms of the deal, Gallagher paid Willis 3,. $ 25 billion and agreed to potentially pay an additional $ 750,000 in 2025 based on the revenue from the acquired business 2024. The deal covers Willis Towers Watson's reinsurance business in accordance with the agreement. Its optional reinsurance business, which is part of its retail brokerage business, was not included.
The combined company has more than 70 offices in 31countries and approximately 2,400 employees, according to a statement from Gallagher.
Gallagher Re will lead. by former Willis Re CEO James Kent as global reinsurance CEO. He will report to Tom Gallagher, Gallagher's CEO of Global Real Estate and Property Management.
Tom Wakefield, a former Aon chief executive who was appointed CEO of Gallagher Re in June, will lead Gallagher Re's operations in the UK and report to Mr. Kent and Simon Matson, CEO of Europe, Middle East and Africa for Gallagher, said Kent.
No further leadership changes have been announced, he said.
"We will implement an integration process now that the companies are together," said Mr. Kent in an interview. "We will try to roll it out in Q1, and by the end of Q1 we will have a combined structure and management team in place."
Prior to the Willis Re acquisition, Gallagher Re was the world's fifth largest reinsurance brokerage Although it remains smaller than rivals Aon and Guy Carpenter & Co. LLC, a unit of Marsh & McLennan Cos. Inc., the three largest reinsurance brokers are considering other reinsurance brokers in the market.
"The reinsurance portion of Gallagher will now be incredible additives to what we do as retailers, ”said Gallagher. "We have much better data and analysis for our customers, we will know what is happening in the very base of the asset management structure, and we will be able to use it in the retail market."
The deal is not intended to create cost savings through a significant number dismissals when the business is combined, he said.
"There is not one person in this business who is asked to leave because we have an overlap. This is not a synergy game, this is an investment game," Gallagher said, noting that is Gallagher's largest acquisition to date.
Gallagher has a long history of growing its retail business through many small acquisitions. Although there are far fewer reinsurance brokers operating, there will be opportunities for further acquisitions in that sector, Gallagher said.
"I see opportunities for tuck-in acquisitions, and we are always interested in creative people joining the company. , sa han.