Legal issues hold up inclusion of Willis Re France and the Netherlands in Gallagher deal
A J Gallagher’s acquisition of Willis Towers Watson’s (WTW) treaty reinsurance business excludes operations in France and the Netherlands, although an option has been put in place for the former to also pick up these businesses.
In a US Securities and Exchange Commission (SEC) filing, details of the $3.25bn Willis Re acquisition announced last week reveal that “WTW has not agreed to divest any business in France or the Netherlands”. But it explains that the firm may exercise an option to sell its treaty reinsurance business in the two countries to A J Gallagher on completion of additional work council consultations and local legal/regulatory requirements.
WTW agreed to sell its global Willis Re facultative operations to Arthur J Gallagher last week for $3.25bn cash and an additional $750m payable in 2025, subject to revenue targets. It follows the collapse of Aon’s acquisition of WTW, which included a side deal to sell Willis Re to A J Gallagher to win regulatory approvals. The new deal adds WTW’s reinsurance operations in Hong Kong and China.
The SEC filing also revealed termination rights for WTW and A J Gallagher, should the sale of Willis Re not complete on or before 12 May 2022, subject to two automatic extensions of three months and one month if all conditions have been met other than regulatory approvals.
The deal is expected to close before the end of this year.
