 
Stamford-based Towers Perrin has long employed experts in handling personnel issues that arise as a result of mergers. In the coming weeks, they will be working up scenarios regarding their own future with the firm.
In a $3.5 billion merger, Towers Perrin, Forster & Crosby Inc. is combining with the larger Watson Wyatt Worldwide Inc. to form Towers, Watson & Co., with as many as 14,000 employees.
Towers Perrin becomes the first large, locally based corporation to disclose a merger agreement into a larger entity since the Wall Street collapse last September, excluding the sale of UST Inc. to Altria Group Inc., which was struck on the eve of the meltdown.
Watson Wyatt is publicly held; Towers Perrin has a partnership structure with between 600 and 700 employee shareholders.
Watson Wyatt CEO John Haley will hold the same title at the new Towers Watson, with Towers Perrin CEO Mark Mactas president of the new company. The board will initially be evenly split with each company nominating six directors.
The companies did not immediately reveal plans for any layoffs as a result of the merger, but indicated they expect to save $80 million annually within three years. The companies aim to complete the merger in the fourth quarter.
“I wouldn”™t say we have plans to restructure the business, but we certainly have always been a firm that has rigorously managed the business ”¦ with an eye on what”™s best for the long-term while keeping us strong in the short-term,” Mactas said, in a conference call with analysts. “One of our mantras has always been you must keep the firm financially strong because that gives you choices going forward. So we manage the firm through tough times with that mindset and through good times with that kind of mindset. We have ”“ we”™ve done a number of contingency planning exercises not knowing what the environment was like. We”™ve been able to contain costs in a number of areas; we got ahead of the curve with some of that going forward.”
Following the deal, Towers Perrin indicated it would continue to maintain the One Stamford Plaza office where it has some 200 employees, but executives publicly vowed to undergo a search for a headquarters location somewhere between metropolitan New York City and Washington, D.C., near where Watson Wyatt has its main office in Arlington, Va.
The companies designated New York City as the headquarters for the holding company through which the merger will be executed.
Watson Wyatt has a local office at Four Landmark Square in Stamford, and both companies maintain locations in New York City and in the insurance hub of Hartford. Towers Perrin also has an office in the Westchester County, N.Y., town of Valhalla.
Tracing its history to 1871 when a predecessor company called Henry W. Brown & Co. was formed, Towers Perrin formally incorporated in 1934 in Philadelphia, opening an office in New York City in 1949. The company”™s revenue reached the $1 billion mark for the first time in 1996.
A graduate of Lehigh University, Mactas joined the firm in 1980 and subsequently led its Chicago office. He succeeded John Lynch has Towers Perrin CEO in January 2001, when the company”™s annual revenue was $1.5 billion; in 2008, revenue at both Towers Perrin and Watson Wyatt exceeded $1.7 billion. Mactas is also a trustee of Westport-based Save the Children.
Even as they have grown, both companies have taken flak from Congress over their counsel to corporations regarding executive compensation. In 2007, U.S. Rep. Henry Waxman requested information from Towers Perrin, a request it refused prompting a Congressional subpoena.
At a December 2007 hearing of Waxman”™s House Oversight and Government Reform Committee, Towers Perrin refuted a short report the committee published lambasting companies like Towers Perrin, Watson Wyatt and Hewitt Associates, a Chicago-based company that has a large office in Norwalk.
