Willis buys rival HRH for $2.1 billion

Willis Group Holdings Ltd. has bought Hilb Rogal & Hobbs Co., its Glen Allen, Va.-based rival. The London-based insurance broker will acquire all of HRH’s outstanding shares of common stock for $46, 50% cash and 50% stock, in a transaction with an equity value of approximately $1.7 billion and an enterprise value of approximately $2.1 billion. The total $2.1 billion price tag is a multiple of estimated HRH revenue for this year, according to a statement from Willis. Annualized synergies for the new unit will hit $140 million by 2012. By combining the two firms, Willis expects to more than double its North America revenue in employee benefits and strengthen its position in California and Texas, as well as in major cities on the East Coast. The purchase, which will close in the fourth quarter of 2008, is subject to regulatory and HRH’s shareholder approval.