Willis Group Holdings, an insurance broker, and Hilb Rogal & Hobbs Company, an insurance and risk management intermediaries, have announced that the companies will combine forces in a transaction that will double Willis's North America revenues.

Under the terms of the definitive agreement, Willis will acquire all of the outstanding shares of common stock of Hilb Rogal & Hobbs Company (HRH) for $46 per share, 50% cash and 50% stock in a transaction having an equity value of approximately $1.7 billion and an enterprise value of approximately $2.1 billion.

The transaction is expected to close in the fourth quarter of 2008 and is subject to customary closing conditions, including regulatory and HRH shareholder approval. The total purchase price of $2.1 billion represents a multiple of 2.4 times estimated 2008 HRH revenues and less than 10 times estimated 2008 EBITDA, including the assumption of an estimated $400 million of HRH debt.