GLOBAL – US-based Watson Wyatt & Co. is to buy the approximately 80% of UK-based Watson Wyatt LLP that it doesn’t already own for around $451m in cash and stock.
Washington-based Watson Wyatt & Co. and Watson Wyatt LLP said they have signed a letter of intent to combine the two firms – to take them to the “next level” as clients become more global.
They said the combined organization will have estimated revenues of more than $1.1bn and will include more than 6,000 associates in 88 offices in 30 countries.
The two firms have operated an alliance called Watson Wyatt Worldwide since 1995.
Watson Wyatt LLP had revenues of approximately $436m for the fiscal year that ended on April 30 2004.
They said the deal “is expected to increase long-term profitability, growth and stockholder value”.
"We are delighted to take our alliance to the next level by combining our businesses,” said John Haley, president and chief executive of Watson Wyatt & Co.
“Our clients are growing more global every day. We can better meet their needs by fully integrating our resources and expertise and by investing as a single firm.
Watson Wyatt LLP senior partner Paul Thornton said: "The decision to combine represents a natural progression in our 10-year alliance. Through this transaction, we expect Watson Wyatt Worldwide to become even more aligned, efficient and nimble when it comes to serving our clients.
“It also opens up new opportunities for growth across geographies and service lines.”
The enlarged firm would seek to expand more aggressively into the Americas and Asia-Pacific, it said. “Europe also represents an attractive market for further expansion, including opportunities to leverage Watson Wyatt & Co.’s technology solutions.”
The transaction is currently scheduled to close on or before June 30 2005.