Jardine Lloyd Thompson Group (JLT) has agreed to sell its global aerospace insurance broking business to Arthur J. Gallagher & Co. (Gallagher) for about £190m.
The deal is seen as a remedy offered by Marsh & McLennan Companies (MMC) to the European Commission to secure the regulator’s approval for its previously announced $5.6bn acquisition of the UK-based JLT.
The sale of the global aerospace operations intends to address a potential overlap in the sector and is part of the ongoing first phase review of MMC’s pending acquisition of the British insurance and reinsurance broker.
JLT’s aerospace business, which also includes Hayward Aviation, is a retail broker of commercial non-life risks related to commercial aircraft, aerospace manufacturing, aerospace infrastructure, space and general aviation.
Hayward Aviation is a UK insurance broker that is engaged in providing aviation insurance solutions for high-net worth individuals and smaller airlines.
In the year ended 31 December 2018, JLT’s aerospace business made revenues of around £65m.
The business has nearly 250 staff operating across 15 countries, who will join Gallagher after closing of the transaction. Out of these, about 100 employees within JLT’s London Market operations will come under Gallagher’s London-based existing aviation division, which most recently acquired Boston Marks, an independent aviation insurance and reinsurance broker.
Gallagher chairman, president and CEO J. Patrick Gallagher, Jr. said: “The addition of JLT’s global aerospace broking operations will firmly position Gallagher as a leading broker in the extremely attractive and dynamic aviation and aerospace sector.
“The business portfolio is a highly complementary geographic fit with Gallagher’s existing footprint and will provide significant growth opportunities for our international businesses.”
Closing of the transaction will be conditional upon completion of the acquisition of JLT by MMC along with receipt of customary regulatory approvals.
The JLT-MMC transaction, which was announced in September 2019, is said to be on track to be wrapped up in the spring of 2019 and will be subject to satisfaction of certain conditions along with receipt of regulatory and anti-trust approvals among others.
In October 2018, the transaction secured the US antitrust approval with the US Federal Trade Commission (FTC) granting it an early termination of the waiting period under the Hart-Scott-Rodino (HSR) Act.