Rolling Meadows, IL, August 13, 2021 — Arthur J. Gallagher & Co. (NYSE: AJG) today announced an agreement to acquire the treaty reinsurance brokerage operations of Willis Towers Watson plc. The transaction is expected to close during the fourth quarter of 2021.
Gallagher Willis

“Broadening our reinsurance brokerage offerings has been a strategic objective at Gallagher and this acquisition will significantly enhance our global value proposition,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. “We were very impressed with the Willis Towers Watson reinsurance professionals we met during our initial due diligence and strongly believe a combination will significantly enhance our offerings to clients and prospects. I look forward to welcoming the 2,200 new colleagues joining us as part of this transaction to our growing Gallagher family of professionals.”

Benefits of the acquisition are expected to include:

  • Expanded global value proposition within reinsurance brokerage
  • A broad suite of analytics capabilities including actuarial services, catastrophe modeling, dynamic financial analysis, rating agency analysis and capital modeling
  • Addition of talented management team
  • Increased product breadth & offerings
  • Further leveraging of Gallagher’s industry-leading alternative risk and ILS business
  • Strengthened relationships with major insurance carriers

Acquired Operations

The operations include all of Willis Re’s treaty reinsurance brokerage operations. For the year ended December 31, 2020, these operations generated $745 million of estimated pro forma revenue and $265 million of estimated pro forma EBITDAC. The pro forma 2020 figures include revenues reported in Wills Re’s 2020 unaudited financial information, and reflect known growth, as well as Gallagher’s estimate of “breakage”, defined as known lost business and the departure of key brokers and other employees, as well as normalization of operating expenses and additional investments. Willis Re’s treaty reinsurance business operates in 24 countries, places over $10 billion of premium annually and represents over 750 insurance and reinsurance company clients.

Key Transaction Terms

Under the agreement, Gallagher will acquire the combined operations for an initial gross consideration of $3.25 billion, and potential additional consideration of $750 million subject to certain third-year revenue targets. Gallagher intends to finance the transaction using cash on hand, including the $1.4 billion of net cash raised via its May 17, 2021 follow-on common stock offering and the $850 million of net cash borrowed via its May 20, 2021 30-year senior note issuance, short-term borrowings and additional free cash generated before close. The funding contemplates Gallagher maintaining its investment grade debt rating.

Integration is expected to take approximately 3 years with total non-recurring integration costs estimated to be approximately $250 million. After giving effect to these assumptions and pro forma results discussed above, the acquired operations would have been approximately 5% accretive to Gallagher’s 2020 adjusted GAAP EPS excluding earnings from clean energy investments and 9% accretive to Gallagher’s 2020 adjusted GAAP EPS excluding amortization and earnings from clean energy investments (see table for 2020 non-GAAP reconciliation).

Other Acquisition Transaction Information

The transaction is subject to customary regulatory approvals. More information, including a presentation outlining the transaction, can be found on the company’s website at The estimates provided in this release and the presentation on the company’s website, may be updated before the transaction closes as more information becomes available.

Conference Call Information

In conjunction with this announcement, J. Patrick Gallagher, Jr., Chairman, President and CEO, will host a conference call on Friday, August 13, 2021 at 8:30 am ET/ 7:30 am CT.

The conference call will be broadcast live through Gallagher’s website at and a conference call replay will be available on the company’s website approximately one hour after the broadcast. The replay can be accessed by going to Investor Relations and clicking on Events & Presentations.

Pro forma revenues

Pro forma revenues reflect Gallagher’s estimate of revenues reported in the acquired operations’ 2020 unaudited financial information, reflecting known growth, as well as “breakage”, defined as known lost business and the departure of key brokers and other employees.

Other Cost Adjustments

In addition, specific costs have been identified as adjustments to the acquired operations’ 2020 financial statements in order to better reflect Gallagher’s estimate of pro forma EBITDAC. Specifically, these cost adjustments include the normalization of operating expenses to reflect the extraordinary impact of the COVID-19 pandemic in 2020 and additional investments in operations attributed to the target business based on the estimated costs to provide specific services from the center.


Morgan Stanley & Co. LLC acted as a financial advisor to Gallagher on this transaction.

About Arthur J. Gallagher & Co.

Arthur J. Gallagher & Co. (NYSE:AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. The company has operations in 57 countries and offers client service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.

Information Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to expectations or forecasts of future events and use words such as “anticipate,” “believe,” “estimate,” “expect,” “contemplate,” “forecast,” “project,” “intend,” “plan,” “potential,” and other similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “see,” “should,” “will” and “would.” You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Examples of forward-looking statements in this press release include, but are not limited to, statements regarding the expected timing of a proposed transaction with Willis Towers Watson plc, the benefits of the proposed transaction with respect to our global value proposition, the expected consideration to be paid in the proposed transaction, the expected revenue, EPS (including adjusted EPS excluding clean energy and adjusted EPS excluding clean energy and amortization), EBITDAC and credit rating impacts of the proposed transaction, the size and status of the combined organization within various jurisdictions, required regulatory approvals, the expected timing of the completion of the proposed transaction, expected duration and cost of integration, and the anticipated financing of the proposed transaction.

Readers are cautioned against relying on any forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include (a) risks related to the integration of the acquired operations, businesses and assets into our company; (b) the possibility that the proposed transaction is not completed when expected or at all because required regulatory approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all; (c) the risk that our free cash generation is insufficient, or the financing required to fund the proposed transaction is not obtained on the terms anticipated or at all; (d) potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; (e) the possibility that the anticipated benefits of the proposed transaction, including cost savings and expected synergies, are not realized when expected or at all, including as a result of the impact of, or issues arising from, the integration of the acquired operations into our company; (f) the possibility that our estimates of lost revenue in the acquired operations from breakage due to departing key brokers and other employees and the loss of clients are incorrect and actual lost revenue is greater than expected; (g) the increased legal and regulatory complexity of entering additional geographic markets, including the risks associated with the labor and employment law frameworks in certain countries where Gallagher does not currently operate; (h) conditions imposed in order to obtain required regulatory approvals; (i) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (j) diversion of management’s attention from ongoing business operations and opportunities; (k) the inability to retain certain key employees of the acquired operations or Gallagher; (l) competitive responses to the proposed transaction; (m) uncertainties as to the timing of the consummation of the proposed transaction and the ability of each party to consummate the proposed transaction; (n) that financial information subsequently presented for the acquired business in our subsequent public filings may be different from that presented herein and (o) additional factors discussed in the section entitled “Information Concerning Forward-Looking Statements” in Gallagher’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 and “Risk Factors” in Gallagher’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The COVID-19 pandemic currently amplifies, and in the future could continue to amplify, the risks, uncertainties and assumptions, reflected in such forward looking statements and risk factors.

Any forward-looking statement made by Gallagher in this press release speaks only as of the date on which it is made. Except as required by applicable law, Gallagher does not undertake to update the information included herein.

Non-GAAP Measures

This press release includes references to Adjusted EBITDAC, Earnings per Share excluding Clean Energy and Earnings per Share excluding Amortization, which are measures not in accordance with, or an alternative to, the GAAP information provided herein. Gallagher believes that each of Adjusted EBITDAC, Earnings per Share excluding Clean Energy, and Earnings per Share excluding Amortization, as defined below, provides a meaningful representation of its operating performance and improves the comparability of Gallagher’s results between periods by eliminating the impact of certain items that have a high degree of variability. The impact of our clean energy investments is excluded from Earnings per Share excluding Clean Energy because upon the sunset of Section 45 tax credits at the end of 2021, our clean energy investments will no longer impact earnings, so we believe this measure is useful to investors to provide comparability between historical and future periods. Further, amortization expense is excluded from Earnings per Share excluding Amortization, a performance measure, because it is a non-cash expense, not part of the ongoing operations of our underlying business, and is variable in amount and frequency and significantly impacted by the timing and size of acquisitions, so its exclusion facilitates comparison of historical, current and forecasted financial performance.

  • EBITDAC is defined as net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables.
  • Adjusted EBITDAC is EBITDAC further adjusted to exclude gains realized from sales of books of business/divestitures, acquisition integration costs related to large acquisitions, workforce related charges, lease termination related charges, costs related to divestitures, acquisition related adjustments and the period-over-period impact of foreign currency translation, as applicable.
  • Earnings per Share excluding Clean Energy is defined as net earnings, excluding the earnings and cost impacts of our clean energy investments, net of applicable taxes, presented on a per share basis.
  • Earnings per Share excluding Amortization is defined as net earnings, excluding amortization costs net of applicable taxes, presented on a per share basis.

The most directly comparable GAAP measure is earnings from continuing operations. Please see “Reconciliation of Non-GAAP Measures” on Gallagher’s website at under “Investor Relations” for the purpose of this measure.

This press release is neither an offer to sell nor a solicitation of an offer to buy any security of Gallagher, nor shall there be any sale of a security in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.