Business Moves

February 11, 2007

Marsh, Putnam

Marsh & McLennan Companies Inc. (MMC) announced that Great-West Lifeco Inc., a financial services holding company controlled by Canada-based Power Financial Corp., has agreed to purchase Putnam Investments. The sale price is $3.9 billion in cash, subject to certain customary adjustments. Putnam is one of the largest investment management firms in the United States, with $192 billion under management at the end of 2006.

The transaction has been approved by the respective boards of directors of MMC and Great-West Lifeco, and is expected to close in the middle of this year, subject to regulatory approval, required client consents, and other customary conditions.

Michael G. Cherkasky, MMC’s president and chief executive officer, said, “This is an important transaction for MMC and its shareholders. We will receive an attractive price for Putnam, strengthen our ability to focus on our core businesses, and significantly enhance our financial flexibility. Selling Putnam is another important step in enhancing long-term shareholder value and driving additional success in our risk and human capital businesses.”

He added that the proceeds to MMC from this sale will allow his company to invest in its business, stock repurchases, and debt reduction.

AIG, 21st Century

American International Group Inc. submitted a letter to the board of directors of 21st Century Insurance Group proposing to acquire the outstanding 38.1 percent publicly held shares of 21st Century for $19.75 per share in cash.

AIG and its subsidiaries own approximately 61.9 percent of the outstanding shares of 21st Century. The aggregate cash consideration payable would be approximately $690 million. Following the transaction, 21st Century would become a wholly owned subsidiary of AIG.

The proposed per share price represents a 25.5 percent premium to the average closing price during the last 12 months. The proposed per share price also represents a multiple of 19.6x the consensus estimates of 21st Century’s 2007 earnings per share (based on a current First Call estimate of $1.01 per share).

AIG has advised 21st Century that AIG’s sole interest is in acquiring the remaining shares of 21st Century held by the public shareholders and that it has no interest in a disposition of its controlling equity stake in 21st Century.

Kingsway, Mendota

Canada’s Kingsway Financial Services Inc. agreed to acquire Mendota Insurance Co., a wholly owned subsidiary of The St. Paul Travelers Companies Inc. The transaction includes Mendota’s wholly owned subsidiaries, Mendakota Insurance Co. and Mendota Insurance Agency Inc.

The Toronto-based company said the purchase price will be funded through internal sources, a portion of which may include Kingsway’s existing undrawn credit facilities.

Kingsway, Robert Plan

Toronto-based Kingsway Financial Services agreed to acquire the renewal rights of The Robert Plan Corp.’s assigned risk business. RPC was given the authority to market the assigned risk programs on behalf of Kingsway, and Kingsway has assumed certain operating functions related to this business. RPC has also been granted an option for a limited period of time to repurchase these rights and acquire these operating functions from Kingsway.

Kingsway is one of the largest truck insurers and non-standard automobile insurers in the U.S. and Canada.

Arthur J. Gallagher, Lowndes Lambert

Illinois-based Arthur J. Gallagher and Co. signed a definitive agreement to acquire the Lowndes Lambert Group Canada Ltd., headquartered in Toronto, Ontario. Terms of the transaction were not disclosed. The transaction is expected to close mid-February, 2007.

Lowndes Lambert Group Canada Ltd. is a Canadian property/casualty retail insurance broker. The firm specializes in insurance for transportation, hospitality and pharmaceutical businesses. Philip G. Kane and his associates will continue to operate from their eight Canadian locations under the direction of James S. Gault, president of Gallagher’s Brokerage Services Division – Retail.

Aon, Footman James

Chicago-based Aon Corp. completed the acquisition of Footman James from Alchemy Partners Limited based in Guernsey. The terms were not disclosed. Aon said that Footman James will continue to trade under its own name for the foreseeable future.

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