On paper the deal creates the world’s largest reinsurance broker by combined revenues, and adds to Marsh’s lead as the biggest broker of primary insurance business
Marsh & McLennan Companies (MMC) has agreed a deal with Jardine Lloyd Thompson (JLT) to buy the rival broker.
Total cash consideration equates to $5.6bn in fully diluted equity value, or an estimated enterprise value of $6.4bn.
On paper the deal creates the world’s largest reinsurance broker by combined revenues, and adds to Marsh’s lead as the biggest broker of primary insurance business (see charts below).
MMC said its deal will be funded by a mix of cash and debt financing proceeds.
The transaction has been approved by the board of directors of each of MMC and JLT.
“The acquisition of Jardine Lloyd Thompson creates a compelling value proposition for our clients, our colleagues and our shareholders,” said Dan Glaser, president and CEO of MMC (pictured).
“The complementary fit between our companies creates a platform to deliver exceptional service to clients and opportunities for our colleagues,” said Glaser.
MMC said it anticipates $250m of “cost synergies” in three years, after one-time integration costs of approximately $375m.
“I am confident that with the addition of the talented colleagues of JLT, Marsh & McLennan will be an even stronger and more dynamic company,” Glaser added.
Following completion of the merger, JLT’s CEO Dominic Burke will join MMC’s executive committee as vice chairman.
“On a personal level, I have come to know, and respect, Dominic Burke and his management team from my time both at MMC and as an underwriter,” Glaser continued.
Burke said: “I am enormously proud of what JLT has achieved, founded on our people, our culture and our unwavering commitment to our clients.
“MMC is, and always has been, one of our most respected competitors and I believe that, combined, we will create a group that will truly stand as a beacon for our industry.”
Goldman Sachs acted as financial advisor and Slaughter and May and Wachtell, Lipton, Rosen & Katz acted as external legal counsel to MMC.
JP Morgan Chase served as financial advisor, and Clifford Chance Rogers & Wells served as external legal counsel to JLT.
Chart data below via Business Insurance and the Insurance Information Institute.