Marsh to Acquire HSBC Insurance Brokers; Enters ‘Strategic Partnership’

Marsh announced that it has concluded an agreement to acquire HSBC Insurance Brokers Ltd (HIBL), a wholly owned subsidiary of the HSBC Banking Group.

The total consideration is valued at £135 million ($218 million), to be paid with a “mixture of Marsh & McLennan Companies, Inc. stock and cash.” The transaction is subject to all relevant regulatory approvals, and is expected to close in the first quarter of 2010.

The two companies are also planning closer cooperation. Marsh said that concurrent with this transaction, it “has entered into a Preferred Strategic Partnership (PSP) with HSBC, one of the world’s largest financial institutions, which will provide additional revenue opportunities to the company.”

The agreement gives Marsh “preferred access to provide insurance broking and risk management services to HSBC’s corporate and private clients,” said the bulletin.

HIBL is an international provider of risk intermediary and risk advisory services headquartered in London. It has approximately 1,400 employees located in 30 offices in the UK, Middle East and Asia. Its roots go back to the founding of Antony Gibbs & Sons in 1808 in London. It is among the top brokers in the UK, placing premiums in excess of £1 billion [$1.6123 billion] in 2008.

Marsh’s bulletin noted that “HIBL holds prominent market positions in other countries where Marsh has both a significant presence and major plans to grow, including the UAE, Saudi Arabia, Qatar, China, Hong Kong, India, Singapore, South Korea and Taiwan. It also enjoys strong market positions in such important sectors as Education, Marine and Specie.”

Marsh’s Chairman and CEO Dan Glaser described the acquisition and PSP as a “great opportunity for Marsh, our clients, our colleagues and for the HIBL team. We are particularly excited by the opportunities available to us through the PSP with HSBC. It will enable us to leverage HSBC’s global network and banking relationships to generate new business.”

He added that Marsh also sees “good growth potential in placing third party business generated via HIBL’s Accident, Health and Contingency, Cargo, Specie and North American Practices.” He indicated this business would be managed “through a dedicated business unit, called Gibbs Hartley Cooper,” which would revive the heritage of “the venerable independent broker.”

Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, added: “The beauty of this agreement is that on the one hand we are improving the breadth and sophistication of HSBC broking services for our customers, while at the same time sharpening our strategic focus on the bancassurance model with emphasis on life, pensions and investments.”

Alex Moczarski, President of Marsh’s International Division, indicated that meshing HIBL’s activities dovetails “excellently with our own, from an operational, cultural and geographic standpoint. This is a strong complementary fit and will deepen our global presence in high growth areas.”

“My UK colleagues and I look forward to welcoming HIBL’s team to Marsh,” added Martin South, CEO of Marsh UK. “Together, we will continue our shared commitment to delivering superb products, solutions and service to our clients as the UK’s pre-eminent broker and risk adviser.”

Source: Marsh – www.mmc.com or www.marsh.com