Marsh McLennan acquires McGriff in $7.75bn deal

December 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

December 2024 Issue

In a deal designed to strengthen its US insurance offering, global professional services company Marsh McLennan is to acquire McGriff Insurance Services, LLC, a subsidiary of TIH Insurance Holdings, the seventh largest insurance broker in the US.

Under the terms of the agreement, Marsh McLennan will pay $7.75bn in cash consideration, funded by a combination of cash and proceeds from debt financing. In conjunction with the transaction, Marsh McLennan will assume a deferred tax asset valued at approximately $500m.

The transaction, which is being conducted by Marsh McLennan through its Marsh McLennan Agency business, is targeted to close by the end of 2024, subject to regulatory clearance and other standard closing conditions.

The insurance sector, typically considered recession-proof, has been posting steady revenue growth this year, in contrast with other financial firms that are facing the brunt of market fluctuations and macroeconomic headwinds.

“McGriff is a business with excellent leadership, outstanding talent and a record of strong growth,” said John Doyle, president and chief executive of Marsh McLennan. “The firm complements Marsh McLennan Agency’s capabilities and culture, and I am excited about future opportunities with them as part of our company.”

A global leader in risk, strategy and people, Marsh McLennan advises companies in 130 countries across four businesses: Marsh McLennan, Guy Carpenter, Mercer and Oliver Wyman. Marsh McLennan has an annual revenue of $23bn and a workforce of more than 85,000 colleagues.

Once complete, the transaction is expected to enhance Marsh McLennan Agency’s capabilities across commercial property and casualty, employee benefits, management liability and personal lines.

“Marsh McLennan Agency has long held McGriff’s legacy and reputation in the highest regard,” said David Eslick, chairman and chief executive of Marsh McLennan Agency. “Their client-centric focus, culture and proven record of success mirror our own.

“The firm will be an important addition to the business we have built over 15 years,” he continued. “Together, our talent and expertise will deliver actionable solutions that help clients build the confidence to thrive.”

An affiliate of TIH, LLC, McGriff is a full-service insurance broker providing risk management and insurance solutions to clients across the US. Founded in 1886, the firm’s coverages include commercial property and casualty, corporate bonding and surety services, cyber, management liability, captives and alternative risk transfer programmes, small business, employee benefits, title insurance, personal lines, and life and health.

Upon closing, the McGriff team of more than 3500 employees, including Read Davis, chief executive of McGriff, will join Marsh McLennan Agency and continue to operate from their existing office locations.

“Marsh McLennan’s global resources and insights will enable us to deliver even greater value to those we serve while creating exciting opportunities for the growth and development of our team,” concluded Mr Davis. “This combination is a reflection of the quality of the McGriff team, and I am excited for our future together.”

Fraser Tennant