Marsh & McLennan (MMC) in September 2018 announced the acquisition of Jardine Lloyd Thompson (JLT) for $5.6 billion.

Based in London, JLT is the eighth-largest insurance broker and employee benefits provider in the world as per 2016 revenues (1.55 billion). JLT was created in 1997 when Jardine Insurance Brokers merged with Lloyd Thompson Group. The firm operates in 40 countries with particular strength in the UK and Australia.

MMC is based in Chicago, Illinois and is the largest broker in the world with revenues of $13.2 billion.

Dominic  Burke, Group Chief Executive of JLT, will join MMC as Vice Chairman and serve as a member of MMC’s Executive Committee, reporting to Dan Glaser, President and Chief Executive Officer of MMC.

MMC expects the deal “to accelerate growth and margin expansion across products and geographies.”

Financial Aspects

MMC will acquire all JLT shares for GBP19.15 per share in cash, a 34% premium over the September 17, 2018 closing price. The deal values JLT at $6.4 billion. The transaction will be funded by cash and new debt. At this time, MM has received irrevocable undertakings from shareholders representing 40.5% of the issued and outstanding JLT shares.

Annual cost synergies of about $250 million are anticipated and will be realized over the next three years, less one-time integration costs of about $375 million.