Towers Perrin, Watson Wyatt to Merge

Management consulting firms Towers, Perrin, Forster & Crosby and Watson Wyatt Worldwide(WW Quote) will merge in a stock deal valued at about $3.5 billion.

The new company, Towers Watson & Co., is expected to have revenue of more than $3 billion and about 14,000 employees. The company will have a presence in more than two dozen countries.

"The combination of Towers Perrin and Watson Wyatt into Towers Watson will create one of the world's leading professional services firms, well positioned for sustained growth and profitability across all geographies and business segments," said Watson Wyatt CEO John Haley, in a statement Sunday. Haley will serve as CEO of the combined company, while Towers Perrin CEO Mark Mactas will be president.

Shareholders of Watson Wyatt and Towers Perrin shareholders each will receive 50% of the combined company.

The companies expect a shareholder vote to take place in the fourth quarter and a closing date soon after that.

Based on Watson Wyatt's closing stock price Friday of $41.18, the Arlington, Va. -based company is worth $1.76 billion. The firm, founded in 1946, helps companies design benefit and compensation plans, human resource strategies, M&A work force planning and provides investment consulting services to pension plans and other institutional funds.

Towers Perrin, founded in 1934, provides compensation and retirement consulting, mergers and acquisition services and financial modeling software to clients across the aerospace, banking, chemical and lodging industries, among others.