McGriff acquisition expected to be modestly accretive in first year: John Doyle, MMC

During Marsh McLennan’s earnings call for the third quarter of 2024, John Doyle, the company’s President and CEO, explained that the global broker’s $7.75 billion acquisition of McGriff Insurance Services, LLC, is expected to be modestly accretive to adjusted earnings per share, excluding amortisation in year one, and become more meaningfully accretive in year two and beyond.

If you recall, Marsh McLennan recently reached an agreement through its subsidiary, Marsh McLennan Agency (MMA) to acquire full-service insurance brokerage, McGriff Insurance Services, for a cash consideration of $7.75 billion, funded by a combination of cash and proceeds from debt financing.

Under the terms of the transaction, which is targeted to close by the end of this year subject to regulatory clearance and other standard closing conditions, Marsh McLennan will assume a deferred tax asset valued at approximately $500 million.

“I just want to reiterate how excited we are to welcome McGriff into the family, obviously subject to regulatory approval. They have a really strong culture. It’s a competitive group, they’re so client focused,” Doyle said.

He continued: “They have excellent specialty capabilities and industry focus, and working together with MMA, we know they can drive better outcomes for clients, and we can create new opportunities for their colleagues as well. So, we’re excited about all that.”

Adding: “We’ve shared the details that we’re going to share about the business. Like other MMA transactions, we don’t disclose their margins when we acquire them, or, for that matter, how they’re growing, but we’re excited about it.

“As I said, it’ll be modestly accretive in year one and more so after that. And you know, we expect to earn a good return on the investment over time. So, there are synergies, of course, but we’re conservative in our modeling and we’re very excited about what the combination can mean.”

Established in 1886, McGriff is a provider of commercial property and casualty (P&C) insurance, surety, employee benefits and personal lines insurance solutions to businesses and individuals across the United States.

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