NU Online News Service, Dec. 18, 11:10 a.m. EST

Willis Group Holdings Ltd. said it has completed a restructuring of its investment in Gras Savoye & Cie, the leading French insurance broker, giving it equal rights on its board with two other stakeholders.

Willis said it acquired the option to purchase 100 percent of the capital in the new holding company in 2015, should it choose to do so, with notification in 2014.

The deal reduces Willis' stake from 48.6 percent of voting rights, 46.2 percent of outstanding shares, to 33 percent.

In return, Willis said it received approximately $156 million of tax-free net cash proceeds from the transaction, which it will use to pay down existing debt.

An existing option that allowed family shareholders to sell their shares in Gras Savoye to Willis between now and 2011 has been cancelled.

Specifically, Willis officials said that with the closing of the transaction, Willis, the family shareholders of Gras Savoye and Astorg, a private equity fund, now own equal stakes of 31.8 percent in the new holding company.

Moreover, each now has equal representation of 33.3 percent of the voting rights on its board.

The remaining 4.5 percent is held by a large pool of Gras Savoye managers, Willis officials said.

The leveraged transaction valued Willis' investment in Gras Savoye at approximately $335 million. Willis said it rolled over approximately $132 million in equity and convertible debt and lent approximately $47 million to the new holding company at a rate of 6 percent per annum.

Gras Savoye has been an associate company of Willis since 1997 when Willis acquired a 33 percent ownership interest. It gradually increased its stake to the 48 percent level it is now reducing, according to Willis.

Special Reports /

Willis Restructures Stake In Leading French Broker

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