Willis Rises After Broker Named to Replace Fossil in S&P 500

Updated on
  • Willis to complete merger with Towers Watson in early 2016
  • Combined company to get WLTW ticker as Fossil joins MidCap 400

Willis Group Holdings Plc, the insurance broker that’s merging with consulting firm Towers Watson & Co., advanced in New York trading after it was named to join the Standard & Poor’s 500 Index.

Willis climbed 4.6 percent to $49.19 at 4 p.m., the most in the 330-company S&P North American Financial Services Sector Index, extending its rally for the year to 9.8 percent. The broker will replace Fossil Group Inc. in the index after regular trading on Jan. 4, S&P said in a statement Monday. The transaction is expected to be completed in early 2016, when Willis Towers Watson Plc will trade under the ticker symbol WLTW.

Willis agreed in June to combine with Towers Watson in a deal valued at more than $8 billion, helping it compete with larger rivals Aon Plc and Marsh & McLennan Cos. Investors approved the transaction this month, and the combined company expects to increase shareholder value by about $4.7 billion through reduced expenses, cost savings and higher revenue, according to a July regulatory filing.

The transaction offers “strategic benefits,”  Jay Gelb, an analyst at Barclays Plc, said in a Dec. 8 note to clients. “Willis’s proposed merger with Towers Watson would transition Willis from a pure-play insurance broker to adding capabilities in employee benefits and health exchanges.”

The revision in the index may prompt money managers to shift holdings. More than $7 trillion is benchmarked to the gauge, according to S&P. Fossil, a maker of watches and other fashion items, will replace Towers Watson in the S&P MidCap 400.

(Updates share price in second paragraph.)
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