Willis acquires Hilb Rogal & Hobbs for $2.1bn

by Gill Montia

Story link: Willis acquires Hilb Rogal & Hobbs for $2.1bn

Worldwide broker, Willis, is acquiring Hilb Rogal & Hobbs (HRH), the North American insurance and risk management intermediary, for $2.1 billion in cash and shares.

The move will double Willis’ North America revenues and provide the firm with opportunities for growth in new markets.

The merger of the businesses will improve the group’s position in California, Florida, Texas, Illinois, New York, Boston, New Jersey and Philadelphia.

It should also double Willis’ North American revenues in Employee Benefits, an area in which the broker has ambitious plans for growth.

Opportunities in other sectors, including personal lines, real estate, health care, environmental, construction, complex property and executive risk, should also be enhanced.

In 2007, HRH generated $800 million in revenues. The group’s international operations, which are based in London, contributed $57 million.

The transaction, which is subject to regulatory and HRH shareholder approval, is expected to close in the fourth quarter of this year.

Willis estimates that it will be 7% accretive to cash earnings per share in 2009; 10% in 2010 and 14% in 2011.