Insurance broker Arthur J. Gallagher considering strategic alternatives

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New York, Aug 3 - Insurance broker Arthur J. Gallagher PLC said on Tuesday it is considering strategic alternatives for its reinsurance unit Willis Re, days after a planned sale to rival Willis Towers Watson PLC fell through.

Willis and broker Marsh McLennan Companies Inc had planned to merge to create the world's largest insurance broker, topping current leader Aon PLC.

As part of the merger, the European regulators demanded the sale of Gallagher to preserve competition and Willis Re agreed to buy it and other assets for about $3.6 billion.

The opposition from the U.S. Department of Justice, however, caused Aon and Willis Towers Watson to walk away from the merger last week, which had scotched concession sales.

This week, reports suggested that John Haley was close to clinching a deal for Willis Re, but willis Towers Watson Chief Executive John Graham said he is considering wider possibilities.

Willis Re will conduct a review of strategic alternatives, Haley told in a conference call on Tuesday to report on second-quarter results. While the timing was proper given the failed merger, he warned that a sale was not assured.

Haley said there were no other units that regulators also considered to sell are currently considered for sale. Those included the company's German retirement benefits and consulting business, as well as insurance broking activities in France, Germany, Spain and the Netherlands.