Towers Perrin, Watson Wyatt to form Towers Watson

Two of the United State's largest human-resources consulting firms, Towers Perrin Forster & Crosby Inc. and Watson Wyatt Worldwide, Inc. have approved a definitive agreement to merge to form a new, publicly listed company called Towers Watson & Co.

Based on the closing price of Watson Wyatt common stock on June 26, 2009, the implied equity value of the transaction is approximately $3.5 billion.

Watson Wyatt is a strong player in pension consulting, while Towers Perrin is stronger in health-care consulting.

Under the terms of the agreement, Watson Wyatt shareholders will be entitled to receive 50 per cent of the combined company's shares on a fully diluted basis. Towers Watson shares issued to Watson Wyatt shareholders in the merger will be freely tradable.

Towers Perrin shareholders, who are all active employees of Towers Perrin, plus a group of Towers Perrin employees to be designated to receive certain equity incentive awards, will be entitled to receive 50 per cent of the combined company's shares on a fully diluted basis.

Watson Wyatt chief executive officer John Haley will serve the combined company as chief executive officer, while, Towers Perrin chief executive officer Mark Mactas will be the president.