Marsh & McLennan Cos. will acquire insurance, reinsurance and employee benefits firm Jardine Lloyd Thompson Group in a £4.3 billion ($5.6 billion) deal.
MMC said in a news release Tuesday that its board and that of JLT have approved the acquisition. Under the terms of the deal, holders of JLT common shares will receive a cash consideration of £19.15 per share, equating to a £4.3 billion deal. MMC said the enterprise value was $6.4 billion.
MMC is based in New York, while JLT's headquarters are in London.
The deal will be funded through a combination of cash on hand and proceeds from debt financing. The business will be acquired through MMC's wholly owned subsidiary MMC Treasury Holdings (U.K.), known as MMC BidCo.
"The acquisition of Jardine Lloyd Thompson creates a compelling value proposition for our clients, our colleagues and our shareholders," said Daniel Glaser, president and CEO of Marsh & McLennan, in the release. "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 (group CEO of JLT) 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."
Mr. Burke will join MMC as vice chairman and also will serve as a member of the executive committee.
Geoffrey Howe, chairman of JLT, said in a separate announcement provided by a JLT spokeswoman: "The JLT board is unanimous that MMC has made a compelling offer, which reflects the substantial value created by the extraordinary efforts of our people. I'm confident that combining the two groups' strengths will create a business uniquely well equipped to serve its clients in the future. We have long admired MMC and we can think of no better home for our business."
JLT was created in 1997 following a merger between Jardine Insurance Brokers and Lloyd Thompson Group. The firm operates across 40 countries, with a particularly focus in the U.K. and Australia, as well as in key emerging markets across Asia and Latin America.
JLT Employee Benefits provides retirement consulting and administration services as well as employee benefits and wellness, life insurance and wealth management services. JLT Group also provides risk and insurance brokerage advice through its JLT Specialty business; and risk analysis and risk transfer strategies for insurers via its JLT Re unit.
MMC already owns investment consultant Mercer. It could not be learned if MMC intends to combine JLT Employee Benefits with Mercer.
The deal is set to close in the spring, subject to antitrust and regulatory approvals and approval by JLT shareholders.
Further details were not immediately available.