GLOBAL - Towers Perrin and Watson Wyatt have been given the final regulatory clearance needed to go ahead with merger plans from the beginning of next year.

An official statement issued today by both firms confirmed the European Commission has given its approval to the merger of the global consultancy firms, providing Watson Wyatt sells its life insurance actuarial software business.

The EC said Towers Watson & Co is allowed to retain a licence to use the software, so existing customers who have installed the software since its launch in 2006 can also continue to use it.

Sales of the software operate will not directly affect pension funds but it is used by insurance companies who assist pensions schemes, and the software is in turn used to help prove to regulators that they have the necessary solvency protection and risk management framework to comply with Solvency II in 2012.

Watson Wyatt said it is currently preparing to sell the business and will announce further info in due course.

John Haley, chief executive of Watson Wyatt and of the soon-to-be-merged Towers Watson, the merger should be completed by the end of the year, providing they cross the final hurdle and gain shareholder approval at both Towers and Watson when they meet on 18 December.

The initial merger announcement in June revealed the combined business - Towers, Perrin, Forster & Crosby Inc and Watson Wyatt Inc - should be valued at $3.5bn (€2.5bn) on completion, and continue to deliver what they describe as "benefits, talent and rewards" support. (See earlier IPE story: Consultancy merger to create Towers Watson)

US authorities have already given their approval to the merger.