Willis Group Holdings Limited and Hilb Rogal & Hobbs Co. will merge in a transaction that will double Willis's North America revenues.

Willis will acquire all of the outstanding shares of common stock of HRH for $46 per share, 50 percent cash and 50 percent stock, in a transaction having an equity value of approximately $1.7 billion and an enterprise value of approximately $2.1 billion.The transaction is expected to close in the fourth quarter of 2008 and is subject to customary closing conditions, including regulatory and HRH shareholder approval.The total purchase price of $2.1 billion represents a multiple of 2.4 times estimated 2008 HRH revenues and less than 10 times estimated 2008 EBITDA, including the assumption of an estimated $400 million of HRH debt. Annualized synergies are expected to amount to approximately $140 million by 2012. Over time, Willis plans to repurchase a majority of the shares issued in connection with the transaction under its previously approved $1 billion buyback plan.Willis expects the acquisition to be accretive to cash earnings per share from the close and to GAAP earnings per share from year two.Willis estimates that the transaction will be 7 percent accretive to cash earnings per share in 2009, 10 percent in 2010 and 14 percent in 2011. It is expected to be 3 percent dilutive to GAAP earnings per share in 2009, 2 percent accretive in 2010 and 6 percent in 2011. It is the company's intention to buy back over time the majority of the shares issued as part of the transaction.The new organization in North America will be renamed Willis HRH upon completion of the transaction.For more information, visit www.willis.com and www.hrh.com.