Marsh & McLennan Completes $5.6 Billion Acquisition of Jardine Lloyd Thompson

April 1, 2019

Marsh & McLennan Cos. (MMC) completed its $5.6 billion acquisition of Jardine Lloyd Thompson Group plc (JLT).

“Today marks the beginning of a new era with Marsh & McLennan and JLT coming together. This is a combination of strength and strength, and the primary focus is growth – in talent, capabilities, revenue and earnings,” said Dan Glaser, president and chief executive officer, Marsh & McLennan Cos.

The deal was first announced in September 2018.

The acquisition advances Marsh & McLennan’s leadership position in insurance and reinsurance brokerage, health and retirement, with a global reach in more than 130 countries, the company said in a statement.

MMC advises 95 percent of Fortune 1000 companies and has significantly expanded its presence in the middle market and small commercial segments with the acquisition of JLT, said the broker. JLT also brings Marsh & McLennan a significant influx of talent — adding more than 10,000 colleagues.

Many of JLT’s top executives have been named to leadership positions at Marsh & McLennan, Marsh, Guy Carpenter and Mercer including former JLT CEO Dominic Burke, who joins Marsh & McLennan as vice chairman and a member of the executive committee. Glaser said, “Our aspiration is to shape our industries and be the employer of choice.”

The JLT name will largely be absorbed into Marsh except it will be used for a new unit, Marsh-JLT Specialty, which was formed by combining the specialty teams of both firms. In addition to becoming vice chairman of Marsh & McLennan Cos., Burke is now chairman of Marsh-JLT Specialty. Lucy Clarke, former CEO of JLT Specialty, is president, Marsh-JLT Specialty.

Attractive for Shareholders

As previously announced, the transaction is expected to be immediately accretive to adjusted cash earnings per share (EPS), and, as modeled, will produce a double-digit internal rate of return, said MMC, explaining that on an adjusted GAAP EPS basis, the deal is expected to be modestly dilutive in year one, neutral in year two, and accretive in year three.

The deal, which was hammered out in about 11 days between MMC’s Glaser and JLT’s Burke, is one of the largest ever involving insurance brokers. Another large deal was agree last year between, KKR & Co. and Canada’s Caisse de Depot et Placement du Quebec acquired USI Insurance Services for $4.3 billion.

In other executive moves, Mark Drummond Brady, former deputy group CEO of JLT Group, is now vice chairman of Marsh, reporting to Doyle. Dean Klisura is now president, Marsh Global Placement where will be responsible for placement protocols and standards across all lines within Marsh. He will also lead the non-specialty placement operations of Marsh, including Bowring Marsh and existing multi-line placement hubs. Klisura will continue to report to Doyle.

Source: Marsh & McLennan Cos.

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