12 January 2010
Published in: Corporate strategy, Software
“We will compete more strongly with the big four”
The merger of Towers Perrin and Watson Wyatt to form Towers Watson has already had a positive impact on the new firm's business, according to Martin Pike, who's in charge of the risk consulting and software business of Towers Watson in Europe, Middle East and Africa. "By bringing the two firms into the same fold, we've already been able to enhance a number of new proposals," he said. "The two firms have lots of complementary relationships and a deeper talent pool so our business is much stronger as a result."
Towers Perrin was strong in market-consistent embedded value for multinationals, Pike explained, and had strong relationships with finance directors, whereas Watson Wyatt had more long-standing regular actuarial appointments.
The merger "is good for clients in the UK as we can apply a larger pool of resources to meet their needs, and we also have better coverage across Europe," stressed Pike.
Until 31 December, the two firms were still in competition with each other. Then, "suddenly we started meeting and talking, sharing information and discussing the future," Pike recalled. "It's a true merger of equals - neither party has got the upper hand, and together we can do great things."
"The merger gives us a wider range of products and services, so there's opportunity for growth and we will compete more strongly with the big four," he predicted.
Senior appointments have already been made: country leaders and heads of sales and business development have been appointed. "A few people are retiring", said Pike, "but there's no obvious need to reduce the size of the teams. There are no plans to close any offices in Europe."
The merger has gone more smoothly than Pike anticipated: "There have been fewer problems than I expected," he admitted.
On the sale of the VIPitech software business which the European Commission competition authorities required as part of their approval for the merger, Pike said progress remains on schedule. An information memorandum has been prepared and a list of interested parties drawn up. He hopes to sell the business in the second quarter.
Did the EU set a deadline? "The timetable is being driven entirely by us, as we would like to get the affected staff into a new home as soon as possible."
The potential buyers include "software firms -- small and large -- competing consulting firms and private equity firms," he added.
At the moment, Towers Watson is continuing to market and sell VIPitech and VEPS, the enterprise edition, and the firm will retain a licence to help clients implement the software after the VIPitech business has been sold.
Development of MoSes and RiskAgility, the solutions the merged firm inherited from Towers Perrin, "will be driven entirely by client needs," said Pike. "The developers won't be able to incorporate anything from VIPitech. Because of the agreement with the European competition authorities, the intellectual property of VIPitech is ring-fenced from the rest of the firm."