Gallagher kicks off $1.5bn share buyback with 'excess cash' as Willis Re deal fails

Global broker  Arthur J Gallagher has unveiled a new $1.5 billion share buyback programme after  terminating its $3.57 billion deal to acquire certain brokerage operations of  Willis Towers Watson (WTW).

Gallagher had been looking to deploy its "excess cash position" since ending its deal with WTW, following the collapse of merger between Aon and Willis Towers Watson on July 26, 2021, under the pressure of the lawsuit filed by the US Department of Justice (DoJ) to block the transaction.

The broker's board of directors have authorised the repurchase of up to $1.5 billion of common stock under a new share repurchase plan. Gallagher said this repurchase plan replaces its prior repurchase programme, of which approximately $1.0 billion remained.

"The repurchase plan has no expiration date and we are under no commitment or obligation to repurchase any particular amount of our common stock under the plan," the company said in a statement. "At our discretion, we may suspend the repurchase plan at any time."

The company also recently announced its plan to exercise the special optional redemption feature of its $650 million tranche of 10-year senior notes issued on May 20.

Separately, the broker has appointed a former Goldman Sachs executive to its board of directors.

Teresa Clarke is chair and CEO of media holding company Africa.com. She was previously a managing director in the investment banking division of Goldman Sachs & Co., where she led corporate finance and merger & acquisition transactions for corporate clients in the industrials and real estate sectors.

"We are delighted to have Teresa Clarke join our Board of Directors," said J. Patrick Gallagher, Jr., chairman, president and CEO of Gallagher. "Teresa brings a wealth of financial, marketing and technology experience and will add a valuable perspective to our Board's deliberations. We look forward to working with Teresa and benefitting from her judgment and counsel."

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