Marsh acquires JLT for $6.4bn

Marsh & McLennan Companies (MMC) is acquiring re/insurance broker Jardine Lloyd Thompson Group (JLT) for $6.4 billion.

The board of directors of both companies have approved the transaction.

Under the terms of the deal, MMC will acquire all issued, and to be issued, share capital of JLT for a consideration of £19.15 pounds per share in cash. On the basis of the closing price of JLT shares on Sept. 17, 2018 of £14.32 this represents a 33.7 percent premium.

The transaction will be funded by a combination of cash on hand and proceeds from debt financing. The total cash consideration would be $5.6 billion in fully diluted equity value while the total estimated enterprise value is $6.4 billion.

Following the completion of the deal, Dominic Burke, group chief executive of JLT, will join MMC as vice chairman and serve as a member of MMC’s executive committee.

MMC said the acquisition of JLT accelerates its strategy to be "the preeminent global firm" in the areas of risk, strategy and people, and further enhance its ability to drive growth and margin expansion across products and geographies.

“The acquisition of Jardine Lloyd Thompson creates a compelling value proposition for our clients, our colleagues and our shareholders," said Dan Glaser, MMC CEO. "The complementary fit between our companies creates a platform to deliver exceptional service to clients and opportunities for our colleagues.

"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.

Burke commented: “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.”

The acquisition of JLT accelerates MMC’s strategy to be the preeminent global firm in the areas of risk, strategy and people, according to the corporate statement. JLT’s track record of strong organic growth and attractive geographic diversification enhances MMC’s ability to accelerate growth and margin expansion across products and geographies, it added.

MMC has committed bridge financing from Goldman Sachs to satisfy certain funds requirements of the UK Takeover Code to complete the transaction. MMC has received irrevocable undertakings from JLT’s largest shareholder, Jardine Matheson Holdings, and JLT directors who collectively represent 40.5 percent of the issued and outstanding JLT shares in support of the transaction.

JLT was created in 1997 when Jardine Insurance Brokers, which was formed almost 50 years ago, merged with Lloyd Thompson Group. The firm now operates in 40 countries with particular strength in the UK and Australia as well as in key emerging markets across Asia and Latin America. Through its specialty business, JLT provides risk and insurance broking advice to energy, mining, healthcare, construction, marine, and aerospace sectors as well as in financial lines, political risk and trade credit.

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