Marsh & McLennan Companies (MMC) will acquire Jardine Lloyd Thompson Group (JLT) in a deal worth $5.6 billion.
The deal is part of MMC’s strategy to become the preeminent global firm in the areas of risk, strategy, and people.
Under the terms of the transaction, which has been approved by the board of directors’ of both companies, MMC will acquire all issued, and to be issued, share capital of JLT. Current holders of common shares will receive cash consideration of £19.15 per share.
The total cash consideration equates to $5.6 billion in fully diluted equity value or an enterprise value of $6.4 billion.
The transaction will be funded by a combination of cash on hand and proceeds from debt financing.
MMC anticipates that annual cost synergies of approximately $250 million will be realised over the next three years, and expects the realisation of those cost synergies to result in one-time integration costs of approximately $375 million.
Goldman Sachs acted as financial advisor, while Slaughter and May and Wachtell, Lipton, Rosen & Katz acted as external legal to MMC.
Morgan Chase served as financial advisor, and Clifford Chance Rogers & Wells served as external counsel to JLT.
MMC hopes that JLT’s track record of strong organic growth and attractive geographic diversification will enhance its ability to accelerate growth and margin expansion across products and geographies.
Dan Glaser, president and CEO of MMC, said the acquisition creates a compelling value proposition for the firm’s clients, colleagues, and shareholders.
Glaser commented: “The complementary fit between our companies creates a platform to deliver exceptional service to clients and opportunities for our colleagues.”
“On a personal level, I have come to know, and respect, Dominic Burke and his management team from my time both at MMC and as an underwriter.”
“I am confident that with the addition of the talented colleagues of JLT, Marsh & McLennan will be an even stronger and more dynamic company.”
Following completion of the transaction, Burke, group chief executive of JLT, will join MMC as vice chairman and serve as a member of MMC’s executive committee.
Burke said: “I am enormously proud of what JLT has achieved, founded on our people, our culture and our unwavering commitment to our clients.”
“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 order to satisfy certain fund requirements of the UK Takeover Code, MMC has committed bridge financing from Goldman Sachs to complete the transaction.
MMC has received irrevocable undertakings from JLT’s largest shareholder, Jardine Matheson Holdings, and JLT directors who collectively represent 40.5 percent of the issue and outstanding JLT shares in support of the transaction.
The transaction is expected to close in spring 2019, subject to receipt of required antitrust and regulatory approvals and the approval of JLT shareholders.
