Global broker Willis Group and professional services consultant Towers Watson have announced an $US18 billion ($23.4 billion) merger.

The transaction was unanimously approved by each company’s board of directors, and the combined company will be renamed Willis Towers Watson.

Upon completion, Willis shareholders will own 50.1% and Towers Watson shareholders 49.9% of the new business.

“These are two companies with world-class brands and shared values,” Willis CEO Dominic Casserley said.

“The rationale for the merger is powerful – at one stroke, the combination fast-tracks each company’s growth strategy and offers a truly compelling value proposition to our clients.”

The new company will employ 39,000 people in more than 120 countries, with the transaction expected to close by December 31. It is expected the merger will realise up to $US125 million ($162.5 million) in cost savings over a three year period.

Towers Watson sold its reinsurance brokerage business to JLT for $US250 million ($325 million) in 2013.

Moody’s has affirmed Willis Group’s ratings following the announcement and moved its outlook to stable from negative based on anticipated improvement in businesses diversification and financial leverage.