Marsh, the world’s leading insurance broker and risk adviser, announced that it had reached an agreement to acquire HSBC Insurance Brokers Ltd (HIBL), a wholly-owned subsidiary of HSBC Bank.
Under the terms of the agreement, Marsh will acquire HIBL for a consideration of £135 million (about Rs. 1,019.67 crore), comprising a mixture of Marsh & McLennan Companies, Inc. stock and cash. The transaction, which is subject to all relevant regulatory approvals, is expected to close in the first quarter of 2010.
Concurrent with this transaction, Marsh 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.
Under the terms of the PSP, Marsh will have preferred access to provide insurance broking and risk management services to HSBC’s corporate and private clients. HIBL is a London-headquartered international provider of risk intermediary and risk advisory services with about 1,400 employees. It holds a prominent market position in India, with offices in Mumbai, Kolkata and New Delhi. Across Asia, it has offices in Hong Kong, China, Singapore, South Korea and Taiwan. It also has a significant presence in the U.K. and the Middle East and enjoys strong market positions in such important sectors as marine and management liability.
“Acquiring HIBL is a great opportunity for Marsh and it will enable us to leverage HSBC’s global network and banking relationships to generate new business,” said Dan Glaser, Marsh Inc’s Chairman and CEO.
Clive Bannister, Group Managing Director, Insurance, HSBC Holdings plc, said: “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.”
Marsh has over 23,000 employees and provides advice and transactional capabilities to clients in over 100 countries. It is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with about 52,000 employees and annual revenue of $11 billion.
The £135 million deal is expected to close in 2010 first quarter.