The wholly-owned insurance subsidiary of Marsh & McLennan Companies Inc. (MMC), Marsh Ltd., will acquire the brokerage business of South Africa-based Alexander Forbes Ltd., including Alexander Forbes Risk Services (“AFRS”). Both companies will merge to form Marsh Africa and the CEO of AFRS will take over as the CEO of Marsh Africa. The financial details of the deal were not disclosed.
Marsh Africa will acquire the 37-million-rand ($5.25 million) loan portfolio of Alexander Forbes. The takeover is expected to be completed in the fourth quarter of the year and is subject to regulatory approval.
Both Marsh Ltd. and AFRS will benefit from this deal. Marsh will become a market leader in South Africa after acquiring Alexander Forbes’ wide-spread network. The combined company will have its presence in 11 countries. Africa is a major market for insurance and risk management services and the acquisition will strengthen MMC’s competitive position vis-a-vis companies like Accenture Plc. (ACN) and Aon Corporation (AON).
Alexander Forbes was established in 1935 and is Africa’s largest independent retirement-fund administrator. It was earlier known as Price Forbes.
Earnings Review
MMC had reported second quarter operating earnings of 50 cents per share, a couple higher than the Zacks Consensus Estimate of 48 cents.
The Zacks Consensus Estimate of earnings for the third quarter of 2011 is currently at 27 cents per share, up about 1% year-over-year. Of the 15 firms covering the stock, 11 firms revised their estimates downward while 2 upward revisions were witnessed.
For 2011, MMC’s earnings are expected to be $1.83 per share, climbing about 11.39% year-over-year.
MMC carries a Zacks #3 Rank, which implies a Hold rating for the short-term.
ACCENTURE PLC (ACN): Free Stock Analysis Report
AON CORP (AON): Free Stock Analysis Report
MARSH &MCLENNAN (MMC): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment