Marsh & McLennan Companies (MMC), the parent company to investment consulting giant Mercer, has announced a $5.6bn (€4.8bn) deal to acquire Jardine Lloyd Thompson Group.
JLT Group is one of Mercer’s main competitors in the pension scheme advisory market in the UK, and also provides insurance, reinsurance and brokerage services.
Dan Glaser, CEO and president of MMC, said in a statement to the stock market this morning that the two firms were a “complementary fit” and would create “a platform to deliver exceptional service to clients and opportunities for our colleagues”.
Dominic Burke, JLT Group’s chief executive, will join MMC as vice chairman following completion of the transaction. He said: “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.”
In its statement, MMC said the purchase “accelerates MMC’s strategy to be the preeminent global firm in the areas of risk, strategy and people”.
Investors in JLT – which is currently listed on the London Stock Exchange and is a constituent of the FTSE 250 index – will receive £19.15 a share in cash, representing a premium of 33.7% based on JLT’s closing share price on 17 September. JLT’s largest shareholder, Jardine Matheson Holdings, has already confirmed support for the deal, as have JLT directors.
The transaction has also been aided by a $5.2bn bridging loan provided by Goldman Sachs.
MMC estimated that integrating the company into its structure would cost $375m, but generate annual cost savings of $250m over the next three years.
The deal is expected to complete in the spring of next year, subject to regulatory approval.
Investment consultants and fiduciary managers in the UK are currently the subject of an inquiry by the Competition and Markets Authority.