"The combination of Towers Perrin and Watson Wyatt into Towers Watson will create one of the world's leading professional services firms, well positioned for sustained growth and profitability across all geographies and business segments," says Watson Wyatt CEO John Haley.
Haley will retain his position as CEO while Towers Perrin CEO Mark Mactas will serve as president of Towers Watson. Using the closing price of Watson Wyatt stock June 26 as a barometer, the equity value of the transaction is estimated at $3.5 billion.
"This is an important transaction for our respective organizations that positions us well for a future of accelerated growth and higher levels of profitability," adds Mactas. "The fit between our firms is excellent … We couldn't be more excited about this combination, which will change the landscape of our industry."
Reuters reports that labor groups are concerned the deal could produce conflicts of interest if firms hire the same consultants to advise on both executive compensation and human resources issues.
"This reduces the number of available consultancy firms not just for compensation consulting, but for actuarial and investment consulting for pension funds, and limits the number of large [consultancy firms] that can advise companies on compensation and employee benefits," Vineeta Anand, a spokeswoman for the AFL-CIO, told the news agency. "We are concerned about the kind of advice that companies will get and the implications for investors."
Towers Perrin and Watson Wyatt anticipate a closing date on the transaction soon after a shareholder vote in the fourth quarter of 2009.
