Marsh & McLennan to Acquire Jardine Lloyd Thompson Group Plc
Sep 18, 2018
The combination enhances capabilities and improves growth profile
The transaction is expected to produce a double-digit IRR
JLT adds a superb team with a relentless focus on client service
"The acquisition of
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
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.
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.
Under the terms of the transaction, MMC will acquire all issued, and to be issued, share capital of JLT for consideration of £19.15 pounds per share in cash. On the basis of the closing price of JLT shares on
We anticipate annual cost synergies of approximately
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.
MMC has committed bridge financing from
A conference call to discuss the transaction will be held at
Additional information regarding the transaction will be available at mmc.com.
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