Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Willis M&A focus on small, not ‘transformational’: Incoming CEO

Reprints
Carl Hess

Willis Towers Watson PLC will pursue small bolt-on mergers and acquisitions to strengthen its capabilities and expand its geographic footprint, but a large-scale deal is unlikely, president and incoming CEO Carl Hess reiterated Friday.

Willis expects to generate $5 billion to $6 billion in free cash flow through 2024, which will be used primarily for share buybacks plus investment opportunities “when superior return potential arises,” Mr. Hess said.

Mr. Hess was speaking at the 45th Nasdaq Investor Conference, held virtually.

Willis has already completed $1 billion of share repurchases, and with the Willis Re sale in its pocket, has “a high degree of conviction” it will pull off $4 billion in share buybacks in 2021 and 2022 previously outlined at its investor day in September, Mr. Hess said.

“As far as M&A is concerned, we will pursue small tuck-ins… We see opportunities there and continue to survey them … but we do not expect any big transformational acquisitions,” Mr. Hess said.

He gave the example of Leaderim, the Israeli brokerage and risk consultancy business that Willis signed a definitive agreement to acquire in November.

At its investor day, Willis said the $5 billion to $6 billion in free cash flow, combined with the after-tax proceeds from the Willis Re divestiture and cash balances would give the company $10 billion to $11 billion in cash through 2024.

The company also intends to grow revenues to $10 billion, deliver $300 million in cost cuts, and a 25% margin expansion by 2024.

Mr. Hess was responding to questions from Michael Phillips, a property/casualty insurance analyst at Morgan Stanley.

 

 

 

 

Read Next