Willis and Towers Watson in £11bn tie-up

Takeover fever gripped the City again as the world’s oldest insurance broker Willis and the human resources consultancy Towers Watson revealed plans for an $18bn (£11bn) merger.

The all-share tie-up is expected to lead to cost savings of between $100m and $125m within three years, although it is not yet known how much of this will be through job cuts.

The two companies employ 39,000 people worldwide, with more than 6,000 based in the UK, including 2,000 at the Willis Building in the City of London. Talks between the pair are understood to have been going on for months.

New York-listed Willis is the world’s third-largest insurance broker and operates in more than 100 countries. Although it is headquartered in the UK, it is domiciled in Ireland for tax reasons.

In contrast, Towers Watson, which can trace its roots to the Manchester actuarial firm R Watson & Sons in 1878, provides pensions and employee benefits advice to major global companies, including 80 per cent of the US’s powerful Fortune 500 businesses.

The combined company will be called Willis Towers Watson and Willis shareholders will own 50.1 per cent of the enlarged group.

John Haley, the chief executive of Towers Watson, will keep the same job, while Dominic Casserley, the British chief executive of Willis, will be his deputy.