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Willis and Towers Watson Combine to Extend Reach: An Update

The merger of Willis Group Holdings Plc and Towers Watson & Co. moved one step closer to reality when shareholders voted on December 11 to accept Willis’ sweetened offer of $10 per share in cash, more than double the amount originally offered in the stock-and-cash deal. Both sides are saying the merger is expected to close “very early in the new year.”

While large institutional investors held out for and ultimately got the higher price they were seeking, none of them questioned the compelling logic of bringing together Willis, a leading global risk advisor, insurance and reinsurance broker, and Towers Watson, a leading global professional services company.

As I suggested in a post this summer after the deal was first announced, the merger will enable the new Willis Towers Watson to compete more fully in the emerging global benefits consulting, administration and brokerage market, following in the footsteps of mergers such as the 2010 Aon Hewitt hook-up.

Beyond the business benefits for shareholders, the merger also will be positive for clients of the two firms, giving them another service provider with broader capabilities and global expertise to choose from. Clients may also have the opportunity to consolidate services and increase their purchasing power so they can leverage relationships across geographies and between multiple service lines. While clients can expect no significant short-term change relative to benefits consulting and administration, they will likely find advantages from an increased focus on and investment in international benefits brokerage and administration.

Major global enterprises are getting serious about managing talent across their organizations by investing in global Human Capital Management (HCM) systems, partnering with integrated global payroll providers and, most recently, pursuing international benefits solutions. The 2015 Towers Watson Talent Management and Rewards Pulse Survey confirms the need for employers to attract and retain qualified workers around the world. The survey suggests that 66 percent of employers are reporting problems attracting employees with the critical skills they need; the ratio of unemployed-person-per-opening is now only 1.4:1. Willis Towers Watson will be positioned to help its clients attract and manage talent on an international level.

ISG keeps close watch on the market and helps enterprises navigate the changing dynamics. Contact us to discuss further.