JLT snaps up reinsurance rival
An insurance broker and employee benefits adviser to major names including McDonald's and supermarket Morrisons is buying the world's fourth-largest reinsurance brokerage business for 250 million dollars (£156 million).
London-based Jardine Lloyd Thompson (JLT) is acquiring US-listed Towers Watson's reinsurance broking division in what has been hailed as a coup for the group.
Towers Watson's reinsurance broker arm employs around 430 employees across 18 offices in six countries, including a site in London, and made revenues of 166 million dollars (£104 million) and pre-tax profits of 26 million dollars (£16 million) in the year to the end of June.
The combined reinsurance business - to be known as JLT Towers Re initially - will have 700 people across 35 offices in 17 countries.
Reinsurance is cover taken out by insurance providers to protect them against losses.
JLT said the move will accelerate its plans to expand its global reinsurance broking arm and see it benefit from "considerably enhanced scale, capability and market presence".
JLT's reinsurance broking boss Alastair Speare-Cole, who will head up the enlarged business, said: "We have long admired Towers Watson as one of the best reinsurance brokers in the world."
Shares in JLT rose 4% as analysts praised the acquisition.
Eamonn Flanagan, insurance expert at Shore Capital Stockbrokers, said it was a "terrific snatch".
"We view this as an excellent deal for JLT, -a signal of its ambition and statement of intent in the reinsurance broking world," he added.
The deal is expected to go through by the end of the year, while the two businesses will be integrated over the course of 2014 and 2015.
JLT employs over 8,500 people across its insurance broking and employee benefit operations.