Willis sees deal to buy rival raising U.S. revenue

By Lilla Zuill

NEW YORK (Reuters) - Willis Group Holdings (WSH.N), the No. 3 global insurance broker, said on Monday it sees its $1.7 billion (860 million pound) deal for a rival broker boosting growth, especially in the United States.

Willis said late on Sunday it would buy Richmond, Virginia-based Hilb Rogal & Hobbs Co HRH.N in a cash-and-stock deal valued at $46 a share. Willis will also assume $400 million of HRH debt under the agreement.

Chief Executive Joseph Plumeri said he does not expect to pursue any deals of similar size soon. "We have enough on our plate that we think is exciting and attractive," he said.

Willis, which is domiciled in Bermuda and has headquarters in New York and London, sees about 30 percent of its total revenue from the United States, but expects that to grow to about 45 percent once it closes its deal with HRH, said Plumeri.

HRH, the eight largest U.S. insurance broker, has 140 offices throughout the United States and two in the United Kingdom.

Plumeri said there is minimal overlap between the two companies, with only 24 of HRH's offices located near Willis operations.

He said while he sees strong cost savings as a result of the deal, these are likely to be driven by such items as technology savings and HRH no longer having to cover expenses associated with being a public company. He said no job cuts nor office closures had been decided.

Willis sees annualized cost savings of about $140 million by 2012, and will rename its North American operations Willis