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March 25, 2019updated 26 Mar 2019 9:44am

MMC-JLT deal secures European Commission nod

Marsh & McLennan Cos (MMC) has secured the European Commission’s approval for its $5.6bn takeover of Jardine Lloyd Thompson Group (JLT).

With the European Commission nod, all regulatory and competition authority approvals required to complete the transaction have been obtained, according to MMC.

In September last year, MMC first signed a deal to acquire JLT, which was formed through the merger of Jardine Insurance Brokers and Lloyd Thompson Group in 1997.

In October 2018, the US Federal Trade Commission (FTC) gave its approval to MMC to acquire the UK-based re/insurance broker JLT. Nearly 99.9% of MMC’s shareholders voted in favour of the deal in November.

Competition Concerns

While granting the permission, the European Commission examined the supply of insurance broking services for specialty sectors, including energy, aircraft operators, aerospace manufacturers and space.

Furthermore, the Commission inspected the provision of employee benefits-related services such as pensions, administration and the fiduciary management of pension funds.

It had said that MMC-JLT deal would result in a significantly concentrated market. It will reduce the number of main competitors from three to two at European Economic Area (EEA) level and from four to three at global level.

To satisfy the Commission’s concerns, MMC agreed to divest its global aerospace operations to Arthur J. Gallagher & Co (AJG).

The transactions will include all of JLT’s activities in Aircraft Operators, Aerospace Manufacturing and Space, as well as a separate, standalone Aviation division (Hayward Aviation).

In a statement, the European Commission said: “These commitments fully address the Commission’s concerns as they remove the entire overlap between the companies’ activities in the supply of insurance broking services in the specialties of Aircraft Operators and Aerospace Manufacturing.

“Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA. The decision is conditional upon full compliance with the commitments.”

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