Consultancy giants merge to form Towers Watson & Co

High unemployment, uncertainty in the Obama-era health care industry, pension fund upheavals, executive bonus controversies -- it's either a great or a terrible time to be in the back-office consultancy business, depending on the quality of your products and sales force. Two of the largest companies in this sector, Watson Wyatt Worldwide (WW) and Towers Perrin have decided to take a new approach to these challenges: combine and conquer.

Today's announced merger will result in the world's largest employee-benefit consulting company, with 14,000 employees and gross annual sales in 2009 of $3.2 billion. The merger will provide Watson shareholders with a 50 percent stake in the new company, Towers Watson & Co. The other half will be apportioned out to Towers Perrin shareholders, who are all employees of the firm. The new company will be publicly traded.