Competition authority gives the planned acquisition the go ahead
The UK’s competition watchdog, the Competition and Markets Authority (CMA), has today (22 November 2021) approved Arthur J Gallagher’s planned acquisition of Willis Towers Watson’s (WTW) treaty reinsurance business.
In May 2021, Gallagher announced to the market its intention to buy certain reinsurance, speciality and retail brokerage operations from WTW – at the time, this was to assist WTW’s own M&A deal with broker Aon, which was subsequently aborted in July this year due to competition concerns.
Following this, in August 2021, Gallagher announced its plans to acquire WTW’s treaty reinsurance brokerage operations for an initial gross consideration of $3.25bn (£2.44bn), with a potential additional consideration of $750m.
Following Gallagher’s announcement, the CMA launched a merger inquiry on 4 October 2021.
Today, the CMA confirmed that it has “cleared the anticipated acquisition by Arthur J Gallagher and Co of the treaty reinsurance business of Willis Towers Watson” and that “the full text of the decision will be available shortly”.
Game changing deal
In its third quarter financial results, published on 28 October 2021, Gallagher’s chief executive for Europe, the Middle East and Asia Simon Matson said the firm’s takeover of Willis Re was “on track”.
He continued: “Turning towards the end of 2021 and start of 2022, broadening our reinsurance business is a key objective for Gallagher and we are looking forward to welcoming the 2,200-strong Willis Re team when we have regulatory approval, which we are expecting in the near future.
“This will be a game changer for this part of our business and make Gallagher a truly global reinsurance broker.”
The transaction is expected to be completed during the fourth quarter of 2021.