TIDMJLT
RNS Number : 5011O
Jardine Lloyd Thompson Group PLC
20 September 2013
The following replaces the earlier announcement and the headline
has been amended at 7am under RNS number 5000O
Jardine Lloyd Thompson Group plc to acquire Towers Watson's
reinsurance brokerage business
Merger with JLT Re to create JLT Towers Re - a new force in the
international reinsurance market
20(th) September 2013, London: Jardine Lloyd Thompson Group plc
("JLT") one of the world's largest suppliers of insurance and
employee benefits related advice, brokerage and associated
services, and Towers Watson, a global professional services company
(NYSE. NASDAQ:TW), have today announced that JLT will acquire the
reinsurance brokerage business of Towers Watson for a cash
consideration of US$250m (GBP156m).
Upon completion, Towers Watson's reinsurance brokerage business
will be merged with JLT's reinsurance business, JLT Re, to create a
new force in the international reinsurance market, with combined
revenues of US$266m(i) (GBP166m) and 700 people in 35 locations in
17 countries. The combined business will be branded for a
transitional period as JLT Towers Re.
Towers Watson's reinsurance brokerage business is one of the
most respected in the market, generating revenues of US$166m(ii)
(GBP104m) and profit before tax of US$26mii (GBP16m) in the year
ended June 2013, making it the 4(th) largest reinsurance broker in
the world. This acquisition significantly accelerates JLT's
existing strategy to build out its international reinsurance
brokerage operations. It combines Towers Watson's well-established
North American and London Market reinsurance businesses with JLT
Re's international reinsurance operations, dynamic brand and strong
London Market operation. The combined business will benefit from
considerably enhanced scale, capability and market presence.
As part of the transaction, JLT Re and Towers Watson have
entered into an Alliance Agreement that will ensure clients have
continued access to Towers Watson's risk consulting and software
services. This Agreement will also provide JLT Towers Re with
continued use of Towers Watson's proprietary actuarial models and
software, alongside deep analytical and modelling capabilities that
will be acquired with the business.
Upon formal completion of the transaction, Ross Howard, who is
currently head of Towers Watson's reinsurance brokerage business,
will become Executive Chairman of the merged operation. Alastair
Speare-Cole, currently CEO of JLT Re, will become CEO of the
enlarged business. Alan Griffin will step down as Chairman of JLT
Re, but will retain a board and advisory role.
The acquisition is subject to regulatory approvals and is
expected to complete before the year end. The two businesses will
be fully integrated over the course of 2014 and 2015.
Total transaction and integration costs are expected to be
approximately US$7m (GBP4m) and US$20m (GBP12m) respectively. The
acquisition will be made on a debt and cash free basis and financed
from JLT's cash resources and debt and is expected to be earnings
accretive in the first full year following completion. The gross
assets being acquired amount to approximately US$106mii
(GBP66m).
Commenting on the transaction, Alastair Speare-Cole, said: "We
have long admired Towers Watson as one of the best reinsurance
brokers in the world. Towers Watson is known in the industry as a
fierce advocate for its clients with deep specialist and analytical
expertise."
Ross Howard, said: "JLT offers our clients and our people a
great opportunity to work with a company that shares our values and
focus on clients. Together we will have the platform, market
presence and support of a strong organisation to attract and retain
the very best people in the market and improve our client
offering."
Tricia Guinn, head of Towers Watson's Risk and Financial
Services business segment said: "We are delighted to agree to a
deal with JLT that offers our clients and our people a clear and
exciting future. We look forward to collaborating with JLT Towers
Re through our new Alliance Agreement. We are excited by the
opportunity to expand our core risk consulting and software
business around the world, working in partnership with their local
operations."
Dominic Burke, Group Chief Executive of JLT said: "I am
delighted to be able to welcome the Towers Watson team and their
clients to JLT. Towers Watson offers us a very strong reinsurance
platform in the key North American market, as well as bringing
further strength in the London Market and a leading analytical
capability."
"We see a significant strategic opportunity through the merger
of the two businesses to create a formidable new force and restore
client choice to the reinsurance market. We are committed to
investing in the business to enhance our client proposition and
drive growth, as we have successfully done across the rest of the
JLT Group in recent years."
ENDS
i. The combined revenues of $266m represents the combined
unaudited revenues of Towers Watson's reinsurance brokerage
business of $166.2m (GBP103.9m) for the twelve months ended 30 June
2013, and JLT Re of $99.3m (GBP62.m) for the 12 months ended 30
June 2013.
ii. Based on unaudited management financial information of
Towers Watson's reinsurance brokerage business for the twelve
months ended 30 June 2013
Contacts
JLT Group
Dominic Burke
Group CEO
+44 20 7309 8145
Mike Reynolds
Group Finance Director
+44 20 7528 4375
Paul Dransfield
Head of Group Corporate Communications
+44 20 7528 4935
Towers Watson
Josh Wozman
Director, Public Relations, Americas
+ 703 258 7670
+ 703 585 2718 (Mobile)
Graham Whitehead
Manager, Public Relations, EMEA
+44 737 274540
+44 7827 953969 (Mobile)
Brunswick Group
Tom Burns/ Dania Saidam (UK)
+44 (0) 20 7404 5959
Notes to Editors
About Jardine Lloyd Thompson Group plc
Jardine Lloyd Thompson Group plc (JLT) is an international group
of risk specialists and employee benefits consultants and one of
the largest companies of its type in the world. JLT offers a
distinctive choice to clients and partners through our combination
of independence, scale and specialism.
JLT is quoted on the London Stock Exchange and employs over
8,500 people worldwide and through the JLT International Network
provides services in more than 135 countries.
www.JLTGroup.com
This announcement may contain "forward looking statements"
regarding the financial position, business strategy or plans for
future operations of the group. By their nature, forward looking
statements involve risk and uncertainty, relating to facts that are
beyond the company's ability to control, such as future market
conditions. Any such statements in this announcement speak only as
at the date of this announcement. The company does not assume any
obligation to, and does not intend to, revise or update these
forward looking statements except as required pursuant to
applicable law.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global
professional services company that helps organizations improve
performance through effective people, risk and financial
management. The company offers solutions in the areas of benefits,
talent management, rewards, and risk and capital management. Towers
Watson has 14,000 associates around the world and is located on the
web at towerswatson.com
This document contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
You can identify these statements and other forward-looking
statements in this document by words such as "may", "will",
"would", "expect", "anticipate", "believe", "estimate", "plan",
"intend", "continue", or similar words, expressions or the negative
of such terms or other comparable terminology. Such statements are
based upon the current beliefs and expectations of Towers Watson's
management and are subject to significant risks and uncertainties.
Actual results may differ from those set forth in the
forward-looking statements.
The following factors, among others, could cause actual results
to differ from those set forth in the forward-looking statements: a
decline in client demand (for example, resulting from the reduced
use of defined benefit plans); the risk of a disclosure breach of
company or client data; the ability to successfully make suitable
acquisitions and divestitures; the ability to successfully address
issues surrounding the number of company shares that will become
freely tradable on January 1, 2014; the risk that potential changes
in federal and state health care regulations, or future
interpretation of existing regulations, may have a material adverse
impact on our business; the risk that changes and developments in
the health insurance system in the United States could harm our
business; our ability to respond to rapid technological changes;
the ability to recruit and retain qualified employees and to retain
client relationships; and the risk that a significant or prolonged
economic downturn could have a material adverse effect on Towers
Watson's business, financial condition and results of operations.
Additional risks and factors are identified under "Risk Factors" in
Towers Watson's most recent Annual Report on Form 10-K filed with
the SEC.
You should not rely upon forward-looking statements as
predictions of future events because these statements are based on
assumptions that may not come true and are speculative by their
nature. Towers Watson does not undertake an obligation to update
any of the forward-looking information included in this document,
whether as a result of new information, future events, changed
expectations or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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