Marsh & McLennan Cos., the world’s largest insurance broker, agreed Tuesday to buy Sedgwick Group PLC, Europe’s No. 1 insurance broker, for $2.05 billion to grow in Europe and Asia.
On a per-share basis, the offer was 58 percent above Sedgwick’s close Monday and was designed to preempt a bid from Chicago-based Aon Corp., the world’s No. 2 broker, said Chris Rathbone, an analyst at Williams de Broe in London.
“The price is meant to be the killer blow,” he said. Executives and others controlling about 40 percent of Sedgwick agreed to the plan, according to New York-based Marsh & McLennan.
Marsh, which had $6 billion of revenues last year, and other insurers are buying rivals in the hopes of boosting profits and getting into new markets.
The acquisition announcement came the same day the European Union approved the purchase by U.S. buyout firm Kohlberg Kravis Roberts & Co. and investors of Britain’s Willis Corroon Group PLC, the world’s No. 3 insurance broker.
The purchases follow Aon’s acquisition of Alexander & Alexander Services Inc. for $1.23 billion in January 1997 and Marsh’s $1.8 billion purchase of Johnson & Higgins in March 1997.
