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Marsh & McLennan Companies, Inc. (NYSE: MMC), a global
professional services firm offering clients advice and solutions in
risk, strategy and people, today announced that it has reached an
agreement to acquire Jardine Lloyd Thompson Group plc (LSE: JLT), a
leading provider of insurance, reinsurance and employee benefits
related advice, brokerage and associated services. The transaction
has been approved by the Board of Directors of each of MMC and JLT.
Under the terms of the transaction, holders of JLT's common shares
will receive cash consideration of GBP19.15 pounds per share. Total
cash consideration equates to $5.6 billion U.S. dollars in fully
diluted equity value, or an estimated enterprise value of $6.4
billion. The transaction will be funded by a combination of cash on
hand and proceeds from debt financing.
"The acquisition of Jardine Lloyd Thompson creates a compelling
value proposition for our clients, our colleagues and our
shareholders. 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," said
Dan Glaser, President and Chief Executive Officer of MMC.
Following completion of the transaction, Mr. Burke, Group Chief
Executive of JLT, will join MMC as Vice Chairman and serve as a
member of MMC's Executive Committee.
Mr. 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."
JLT was created in 1997 when Jardine Insurance Brokers plc,
which was formed almost 50 years ago, merged with Lloyd Thompson
Group plc. The firm now operates in 40 countries with particular
strength in the UK and Australia as well as in key emerging markets
across Asia and Latin America.
Through its Specialty business, JLT provides risk and insurance
broking advice to energy, mining, healthcare, construction, marine,
and aerospace sectors as well as in financial lines, political risk
and trade credit. JLT Re delivers world class risk analysis and
risk transfer solutions to its insurer clients across all classes
of treaty and facultative reinsurance. JLT's Employee Benefits team
acts as advisors, brokers and service providers in the areas of
pensions consultancy and administration, employee benefits and
wellness, life insurance, and wealth management.
Strategic Rationale
The acquisition of JLT accelerates MMC's strategy to be the
preeminent global firm in the areas of risk, strategy and people.
JLT's track record of strong organic growth and attractive
geographic diversification enhance MMC's ability to accelerate
growth and margin expansion across products and geographies.
Financial Terms
Under the terms of the transaction, MMC will acquire all issued,
and to be issued, share capital of JLT for consideration of
GBP19.15 pounds per share in cash. On the basis of the closing
price of JLT shares on September 17, 2018 of GBP14.32 this
represents a 33.7% premium.
We anticipate annual cost synergies of approximately $250
million that will be realized over the next three years. It is
expected that the realization of these cost synergies will result
in one-time integration costs of approximately $375 million.
We expect the transaction to be immediately accretive to
adjusted cash EPS and, as modeled, will produce a double-digit
internal rate of return. On an adjusted GAAP EPS basis, we
anticipate the deal will be modestly dilutive in 2019, but we
expect it to be neutral to adjusted GAAP EPS in 2020.
Transaction Details
MMC has committed bridge financing from Goldman Sachs to satisfy
certain funds requirements of the U.K. Takeover Code to complete
the transaction. The transaction is intended to be effected by
means of a U.K. court-sanctioned scheme of arrangement and is
expected to close in spring of 2019, subject to receipt of required
antitrust and regulatory approvals and the approval of JLT
shareholders. MMC has received irrevocable undertakings from JLT's
largest shareholder, Jardine Matheson Holdings, and JLT directors
who collectively represent 40.5% of the issued and outstanding JLT
shares in support of the transaction.
Advisors
Goldman Sachs acted as financial advisor and Slaughter and May
and Wachtell, Lipton, Rosen & Katz acted as external legal
counsel to MMC. J.P. Morgan Chase served as financial advisor, and
Clifford Chance Rogers & Wells served as external legal counsel
to JLT.
Conference Call
A conference call to discuss the transaction will be held at
8:30 a.m. Eastern time on Tuesday September 18, 2018. To
participate in the teleconference, please dial +1 866 831 8658.
Callers from the United Kingdom should dial +44 0808 1011183.
Callers from outside the United States or the United Kingdom should
dial +1 785 424 1243. The access code for all numbers is 529923.
The live audio webcast may be accessed at mmc.com. A replay of the
webcast will be available approximately two hours after the
event.
Additional information regarding the transaction will be
available at mmc.com.
About Marsh & McLennan Companies
Marsh & McLennan (NYSE: MMC) is the world's leading
professional services firm in the areas of risk, strategy and
people. The company's nearly 65,000 colleagues advise clients in
over 130 countries. With annual revenue over $14 billion, Marsh
& McLennan helps clients navigate an increasingly dynamic and
complex environment through four market-leading firms. Marsh
advises individual and commercial clients of all sizes on insurance
broking and innovative risk management solutions. Guy Carpenter
develops advanced risk, reinsurance and capital strategies that
help clients grow profitably and pursue emerging opportunities.
Mercer delivers advice and technology-driven solutions that help
organizations meet the health, wealth and career needs of a
changing workforce.
Oliver Wyman serves as a critical strategic, economic and brand
advisor to private sector and governmental clients. For more
information, visit mmc.com, follow us on LinkedIn and Twitter
@mmc_global or subscribe to BRINK.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as
defined in the Private Securities Litigation Reform Act of 1995.
These statements, which express management's current views
concerning future events or results,
use words like "anticipate," "assume," "believe," "continue,"
"estimate," "expect," "intend," "plan," "project" and similar
terms, and future or conditional tense verbs like "could," "may,"
"might," "should," "will" and "would."
Forward-looking statements are subject to inherent risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in our forward-looking statements.
Factors that could materially affect our future results include,
among other things:
* the inability of us or JLT to retain and hire key personnel;
* costs or difficulties related to the integration of JLT's business
and operations with our business and operations;
* the failure to obtain, or delays in obtaining, required antitrust
and regulatory approvals for the transaction with JLT;
* the occurrence of any event or other circumstances
that could give rise to
the termination of our agreement with
JLT in respect of the transaction;
* unexpected costs, liabilities, charges or expenses
resulting from the transaction with JLT;
* potential adverse reactions, changes to business
relationships or competitive responses
resulting from the announcement, pendency or
consummation of the transaction with JLT;
* the impact from lawsuits, other contingent liabilities
and loss contingencies arising
from errors and omissions, breach of fiduciary
duty or other claims against us;
* our organization's ability to maintain adequate safeguards to protect
the security of our information systems and confidential, personal
or proprietary information, particularly
given the large volume of our
vendor network and the need to patch software vulnerabilities;
* our ability to compete effectively and adapt to changes
in the competitive environment, including
to respond to disintermediation, digital disruption
and other types of innovation;
* the financial and operational impact of complying with laws and
regulations where we operate, including cybersecurity and data
privacy regulations such as the E.U.'s General Data Protection
Regulation, anti-corruption laws and trade sanctions regimes;
* the regulatory, contractual and reputational
risks that arise based on
insurance placement activities and various broker revenue streams;
* the extent to which we manage risks associated
with the various services,
including fiduciary and investments and other advisory services;
* our ability to successfully recover if
we experience a business continuity
problem due to cyberattack, natural disaster or otherwise;
* the impact of changes in tax laws, guidance and
interpretations, including related to certain
provisions of the U.S. Tax Cuts and Jobs Act,
or disagreements with tax authorities;
* the impact of fluctuations in foreign exchange
and interest rates on our results;
* the impact of macroeconomic, political,
regulatory or market conditions
on us, our clients and the industries in which we operate; and
* the impact of changes in accounting rules or in our accounting
estimates or assumptions, including the
impact of the adoption of the new revenue recognition,
pension and lease accounting standards.
The factors identified above are not exhaustive. Further
information concerning Marsh & McLennan Companies and its
businesses, including information about factors that could
materially affect our results of operations and financial
condition, is contained in the Company's filings with the
Securities and Exchange Commission, including the "Risk Factors"
section and the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of our most recently
filed Annual Report on Form 10-K. We caution readers not to place
undue reliance on any forward-looking statements, which are based
only on information currently available to us and speak only as of
the dates on which they are made. We undertake no obligation to
update or revise any forward-looking statement to reflect events or
circumstances arising after the date on which it is made.
Media Contact:Erick R. GustafsonMarsh & McLennan Companies+1
202 263 7788erick.gustafson@mmc.com
Investor Contact:Dan FarrellMarsh & McLennan Companies+1 212
345 3713daniel.farrell@mmc.com
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(END) Dow Jones Newswires
September 18, 2018 02:55 ET (06:55 GMT)
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