Marsh & McLennan to buy Jardine Lloyd Thompson for £4.3bn

Shares in Jardine Lloyd Thompson surged on Tuesday after the insurance broker agreed to be bought by US professional services firm Marsh & McLennan Companies (MMC) for around £4.3bn.

Under the terms of the deal, which will be funded by a combination of cash on hand and proceeds from debt financing, Jardine shareholders will receive a cash consideration of £19.15 per share. The price represents a 33.7% premium to the closing share price of £14.32 on Monday.

Marsh & McLennan expects annual cost synergies of approximately $250m, realised over the next three years.

MMC said The acquisition accelerates its strategy to be the preeminent global firm in the areas of risk, strategy and people. Jardine’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, the company said.

Dan Glaser, president and chief executive officer of MMC, said: "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."

Following completion of the acquisition, which has been approved by the boards of directors of both companies, Jardine’s chief executive Dominic Burke will join MMC as vice chairman and serve as a member of MMC's Executive Committee.

RBC Capital Markets said this was "a very attractive" bid with little chance of another bid materialising.

"At 26.6x our 2019E earnings, we see the price as attractive for JLT shareholders," it said. "With a relatively high multiple for JLT, we see the potential for any interloper being low, and with the support of both JMH and management we expect that this deal will go through with few difficulties."

RBC added the acquisition validates JLT's focus on expanding its specialty business in recent years.

At 0920 BST, Jardine shares were up 31% at 1,878p.