US merger for Towers Perrin, Watson Wyatt

CONSULTING firms Towers Perrin Forster &amp; Crosby and Watson Wyatt Worldwide plan to merge in an all-stock deal valued at about $3.5bn (&pound;2.1bn), as they hope to cut costs amid an economic slump that caused clients to curb discretionary spending.<br /><br />Under terms of the deal, announced yesterday, Watson Wyatt&rsquo;s shareholders will get half of the shares in the new company, while Towers Perrin, which is not listed, will distribute the other half between its investors and some employees.<br /><br />Stock in Watson Wyatt was down 7.5 per cent to $38.11 in afternoon trading.<br /><br />Watson Wyatt chief executive John Haley will be chairman and chief executive of the combined company. Watson&rsquo;s chief financial officer Roger Millay will hold the same title at the new company. Towers Perrin&rsquo;s chief executive Mark Mactas will serve as president and chief operating officer of the new company.<br /><br />The companies expect to save $80m a year within three years through synergies but declined to comment on job cuts.<br /><br />Watson Wyatt has 7,700 staff, 3,000 of which are in Europe, mostly in the UK where the company is well known as an investment consultant.