MMC Acquisition of JLT on Track to Close in Spring

January 31, 2019

Marsh & McLennan Cos.’ $5.6 billion acquisition of Jardine Lloyd Thompson Group is on track to close this spring.

MMC CEO Dan Glaser, who described the deal as one of “strength on strength,” told analysts today that the transaction is still going through the regulatory approval process.

The deal was first announced last September.

“This combination will enhance capabilities for our clients, increase opportunities for our colleagues and create value for our shareholders,” Glaser said.

The Federal Trade Commission (FTC) and Justice Department have approved the proposed acquisition, as have JLT shareholders.

While the JLT acquisition was an obvious highlight for MMC during 2018, its middle marketMarsh & McLennan Agency (MMA) also had a productive year, Glaser noted. MMA added seven new firms during the year and most recently signed a deal to acquire Bouchard Agency in Florida, an agency with $42 million in revenues.

Glaser told analysts that MMA has a “good acquisition pipeline” and despite its commitment to the JLT acquisition, the company will continue to provide funding for MMA’s acquisition activities going forward.

MMC and its subsidiaries reported financial results for the fourth quarter and full year 2018.

In the fourth quarter, MMC produced revenue growth of 5%, including 6% in Risk & Insurance Services and 3% in Consulting and adjusted operating income growth of 15% in the quarter. Consolidated revenue in the fourth quarter of 2018 was $3.7 billion.

For the year, MMC generated revenue growth of 4%, adjusted operating income growth of 8% and adjusted earnings per share EPS growth of 11%. For the year 2018, consolidated revenue was $15 billion.

Risk & Insurance Services

Risk & Insurance Services, which includes Marsh and Guy Carpenter, revenue was $1.9 billion in the fourth quarter of 2018, down 2% compared with the fourth quarter of 2017. On an underlying basis, revenue increased 6%.

Marsh’s revenue in the fourth quarter of 2018 was $1.8 billion, up 6% on an underlying basis. In U.S./Canada, underlying revenue rose 7%. International operations produced underlying revenue growth of 5%.

For the year 2018, Marsh’s revenue increased to $6.9 billion, up 4% on an underlying basis.

Guy Carpenter’s fourth quarter revenue was $102 million, up 5% on an underlying basis. For the year 2018, Guy Carpenter’s revenue increased to $1.3 billion, up 7% on an underlying basis.

Consulting

Consulting revenue was $1.8 billion in the fourth quarter of 2018, an increase of 4%. Mercer’s revenue was $1.2 billion in the fourth quarter, an increase of 3%. For the year 2018, Mercer’s revenue increased to $4.7 billion, up 3% on an underlying basis. Oliver Wyman Group’s revenue was $577 million in the fourth quarter, an increase of 7%. For the year 2018, Oliver Wyman Group’s revenue increased to $2 billion, up 5% on an underlying basis.

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