The European Commission has approved Marsh & McLennan Companies (MMC)’s acquisition of Jardine Lloyd Thompson (JLT) Group, subject to conditions relating to JLT’s global Aerospace practice.
In September 2018, MMC agreed to acquire JLT Group in a deal worth $5.6 billion.
The European Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
In its investigation of the Marsh JLT acquisition, the Commission examined the effects of the deal on competition in the markets where the activities of the two companies overlap.
The Commission felt this was particularly pressing in the supply of insurance broking services for specialty sectors, such as energy, aircraft operators and aerospace manufacturers, and the provision of employee benefits (EB)-related services.
The Commission found that the merger would raise no competition concerns in relation to EB-related services because a sufficient number of alternative suppliers are present, and the companies are not close competitors.
However, it was concerned that the acquisition could negatively affect competition in the airport operation and aerospace manufacture specialty markets, and could have led to higher prices, less choice and lower quality of services in these markets.
To address these concerns, the companies offered to divest JLT’s global Aerospace practices, which includes all of JLT's activities in Aircraft Operators, Aerospace Manufacturing and Space, as well as a separate, standalone Aviation division, to a suitable buyer.
The Commission noted: “These commitments fully address the Commission's concerns as they remove the entire overlap between the companies' activities in the supply of insurance broking services in the specialties of aircraft operators and aerospace manufacturing.”
“Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA.”
“The decision is conditional upon full compliance with the commitments.”