18 September 2018Actuarial & underwriting

Marsh to acquire JLT Group for $6.4bn

Marsh & McLennan Companies (MMC) has agreed to acquire JLT Group for $6.4 billion, expected to close in Spring 2019.

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.

Details of how this will affect the captive businesses Marsh Captive Solutions and JLT Insurance Management will be determined closer to closing of the deal, a Marsh spokesperson said.

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 deal 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.

Further to this 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 CEO Daniel Glaser expects the group will accelerate the pace of growth through the acquisition.

While MMC’s organic revenue growth expectation was 3-5 percent, Glaser said this is now set to move upwards as the company benefits from JLT which operates at a faster growth pace and adds new regions and lines of business to the group.

JLT operates in reinsurance, specialty and employee benefits. In the first half of 2018 the broker recorded organic revenue growth of 4 percent. Specialty contributed with 4 percent organic growth during the period, reinsurance 6 percent and employee benefits with 4 percent.