Consultants Towers Perrin, Watson Wyatt agree to merge

* Merger valued at about $3.5 billion

* New company to be called Towers Watson & Co

NEW YORK, June 28 (Reuters) - Management consulting firms Towers Perrin Forster & Crosby Inc and Watson Wyatt Worldwide Inc (WW.N: Quote, Profile, Research) on Sunday announced an agreement to merge into a new publicly listed company called Towers Watson & Co.

The deal, valued at about $3.5 billion, will help the companies extend their global reach, the companies said in a statement.

Under the terms of the agreement, Watson Wyatt shareholders would receive 50 percent of Towers Watson shares on a fully diluted basis. Towers Perrin shareholders and some of its employees would be entitled to 50 percent of the new company's shares on that basis, the companies said.

Watson Wyatt Chief Executive John Haley will be the new company's CEO, while Towers Perrin CEO Mark Mactas will serve as its president, the statement said.

Annual revenue for Towers Watson is seen at more than $3 billion and the company said it expects about $80 million in pretax annual synergies.

"Full realization of synergies" will take three years and cost about $80 million, according to the statement.

Towers Watson will also have significant noncash expenses during the first two years after the transaction is completed, the companies said. The transaction is expected to add to diluted per-share earnings within three years following the consummation of the deal. (Reporting by Aarthi Sivaraman, editing by Maureen Bavdek)